Safe and convenient to use, credit cards are an efficient tool to boost credit score and dealing with expected and unexpected expenses. A reliable mode of payment, swiping a credit card provides a sense of freedom along with an opportunity to earn numerous rewards, cash-backs, and discount vouchers. While one can easily apply online for a credit card, it is extremely important to learn about the countless ways for obtaining a broad range of benefits it has to offer.
Scroll down to know in detail about the 10 effective tips for earning more out of a credit card.
- Choosing your card wisely
You must be quite careful while selecting a credit card that suits your lifestyle to make the most of its benefits. Different cards have diverse tie-ups with shopping brands, travel agencies, etc. that provide attractive discounts to help you maximize the profits.
- Understand credit utilization ratio
Defined as the percentage of available limit you use, the credit utilization ratio must be assessed carefully to avoid any damage to your overall credit health. Despite having a high credit limit, keeping the utilization below 30% is effective for maintaining a healthy CIBIL score.
- Pay the bill in full
The credit card’s entire outstanding amount must be paid in full at the end of your billing cycle to avoid a hefty interest charge on it. If you pay the minimum due amount, it causes a rollover of the remaining balance leaving you in debt that may pile upon with each month. Therefore, try to pay the full bill amount before the due date.
- Keep a check on all related fees
For reaping maximum credit card benefits, you should check several other related charges such as joining fee, annual fee, finance charges, transfer fee, cash advance charges, foreign transaction fees, over-limit fees, etc.
- Earning rewards
Credit cards are quite useful in saving your money when it comes to paying the utility bills, booking movie tickets, ordering food online, etc. as they help in earning you cash-backs and reward points. One must pay attention to all the deals related to a particular credit card to take full advantage.
- Using float cleverly
A key aspect while availing of a credit card is extending your interest-free period to the maximum i.e. 55 days (30 days float + 25 days grace period) by purchasing the card at the start of the billing cycle.
- Pay the bill on time
Another crucial factor for maintaining healthy credit is making timely payments as the banks charge a heavy late payment fee for defaulters. Additionally, delayed payments will also affect your credit score poorly, questioning your debt-handling ability which will make it difficult to get loans in the future.
- Go for chip-based cards
Due to an increase in credit card fraudulent activities, one should opt for the new-age chip and PIN cards, instead of the metallic strip ones to ensure a quick and secure transaction.
- Avail card benefits with family members
Another efficient way to maximize the profits is keeping track of different credit cards owned by your siblings or spouse in the family to avail multiple offers and complimentary rewards.
- Avoid keeping multiple cards
A credit card can be a financial asset unless you purchase them in excess turning them into a financial burden. Hence, make smart use of your limited assets for availing maximum credit card benefits.