Credit Cards are handy tools that help you in purchasing goods and services on credit. From bill payments, to booking your travels, to shopping, there are several ways you can use a Credit Card. A Credit Card allows you to spend stress-free and repay the amount at a later date, and earn reward points. This articleill help you better understand the usage, rewards and offers onCredit Cards.
We have listed some of the spends which can be taken care of by a Credit Card:
- Bill Payment– Utility bills such as water, electricity, phone bills, etc. can be paid by makinguse of a Credit Card online. You can also opt for the auto debit feature for these bills such that the pending bill amount is deducted automatically, and you do not skip a payment.
- Travel– A Credit Card comes to your rescue to ensure a great holiday. Booking your tickets to reserving your hotel stay (even the seasonal shopping that you may require before your special holiday) can be done with a swipe of a Credit Card. If you are a frequent traveller, you can also opt for Credit Cards that give you reward points, that can be converted to airmiles. With this, you can also get complimentary access to airport lounges across the globe. This article will help you understand how to best use aCredit Cardto maximise your travels.
- Shopping– You can use your Credit Card for shopping in stores that accept Credit Card payments. It could be for clothes, shoes, groceries, etc. While shopping online, there are rarely any websites or apps that do not accept Credit Card payment. Auto-debit feature for websites streaming music and movies also gives you access to unlimited entertainment through your Credit Card.
- Dining out– Several restaurants accept Credit Card payments. If you eat out frequently, you can opt for a Credit Card that gives you reward points and offers while dining out. Cards such as HDFC Bank Diners Clubmiles Credit Card give you dining offers and privileges at premium hotels.
- Home furnishing– Your Credit Card spends may not be limited to smaller spends. Big ticket items such as furniture, a refrigerator, or a television can also be purchased using your Credit Card. The amount can be converted into easy EMIs such that you do not burden yourself with the high expense.
- Cab rides– Past few years have enabled access to chauffer-driven cars that arrive right at your doorstep, at the click of a button. The payment for these services can be made online using your Credit Card. You can link your Credit Card to the payment gateway on these apps and ride without any worry of cash at hand.
While choosing your Credit Card, you can opt for one that provides the best offers and rewards on spending purposes you need to use it for. When using a new Credit Card, watch out for the welcome benefits that it offers. It is essential that you use your Credit Card smartly and wisely.
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FAQs
Charge everything (and pay it back quickly)
So the more you charge, the greater your rewards. This doesn't mean spending more money than you have; it means using a rewards credit card for spending that you're already doing anyway. Paying off your purchases immediately allows you to avoid interest charges.
How to maximize your credit card rewards? ›
How to maximize your credit card rewards
- Choose rewards that match your spending.
- Use the best card for each rewards category.
- Earn your sign-up bonus.
- Explore redemption options.
- Take advantage of all your card perks.
- Pay off your bills in full each month.
- Read the fine print.
6 Credit card tips for smart users
- Pay off your balance every month. ...
- Use the card for needs, not wants. ...
- Never skip a payment. ...
- Use the credit card as a budgeting tool. ...
- Use a rewards card. ...
- Stay under 30% of your total credit limit.
- Pay on time. Paying your credit card account on time helps you avoid late fees as well as penalty interest rates applied to your account, and helps you maintain a good credit record. ...
- Stay below your credit limit. ...
- Avoid unnecessary fees. ...
- Pay more than the minimum payment. ...
- Watch for changes in the terms of your account.
By paying your debt shortly after it's charged, you can help prevent your credit utilization rate from rising above the preferred 30% mark and improve your chances of increasing your credit scores. Paying early can also help you avoid late fees and additional interest charges on any balance you would otherwise carry.
What are at least 3 ways you should use a credit card to maximize your credit score? ›
The best way to build credit with a credit card is to use the card responsibly. This means paying your bill on time, every time, and only spending a small portion of your credit limit. Over time, this can help you establish a positive credit history and boost your score.
What is the most rewarding credit card? ›
FULL LIST OF EDITORIAL PICKS: BEST REWARDS CREDIT CARDS
- Wells Fargo Active Cash® Card. ...
- Citi Double Cash® Card. ...
- Blue Cash Preferred® Card from American Express. ...
- Chase Freedom Unlimited® ...
- Capital One SavorOne Cash Rewards Credit Card. ...
- Chase Freedom Flex® ...
- Discover it® Cash Back. ...
- Citi Custom Cash® Card.
Bottom line. Since lenders typically don't accept credit cards, you can usually only make a mortgage payment on your card via a third-party platform. Paying one debt by adding to another is a risky maneuver, however, and you should only consider it if you can afford to cover the payment in full.
What is the number 1 rule of using credit cards? ›
Pay your balance every month
Paying the balance in full has great benefits. If you wait to pay the balance or only make the minimum payment it accrues interest. If you let this continue it can potentially get out of hand and lead to debt. Missing a payment can not only accrue interest but hurt your credit score.
Should I pay off my credit card in full or leave a small balance? ›
Bottom line. If you have a credit card balance, it's typically best to pay it off in full if you can. Carrying a balance can lead to expensive interest charges and growing debt.
10 tips for responsible credit card usage
- Read your card agreement and know your terms. ...
- Be aware of potential fees. ...
- Make payments on time. ...
- Pay more than the minimum. ...
- Stay below your credit limit. ...
- Check your monthly statements carefully for accuracy. ...
- Report a lost or stolen card immediately. ...
- Simplify payments.
Using a single card is one of the best ways to use a credit card. Most people prefer to have several cards. You should resist the temptation to get multiple cards, even if many banks offer you the chance. You must also restrict your expenses below 30% of the credit limit provided so that your credit score remains high.
Is it OK to use your credit card a lot? ›
Most experts recommend keeping your overall credit card utilization below 30%.
How can I get the most cash from my credit card? ›
There are several ways to get cash from your credit card:
- At an ATM, much like how you'd use a debit card to withdraw cash.
- At a bank branch, with the help of a teller.
- By using convenience checks you can get from your credit card issuer.
The best way to build credit with a credit card is to use the card responsibly. This means paying your bill on time, every time, and only spending a small portion of your credit limit. Over time, this can help you establish a positive credit history and boost your score.
How much should I spend with my credit card as a max? ›
Many credit experts say you should keep your credit utilization ratio — the percentage of your total credit that you use — below 30% to maintain a good or excellent credit score.
How do I use my credit card over limit facility? ›
Generally, banks may approve transactions surpassing the credit limit as a service gesture, provided the cardholder has consented. While there are no strict rules governing Credit Card over limit usage, utilising this facility only in exceptional circ*mstances is advisable.
How can you use a credit card limit wisely? ›
To use your card effectively when making purchases, you should only charge what you can afford to pay off in full each month. In general, it's also a good rule of thumb to keep your credit utilization ratio below 30 percent.
