Smart ways to use your credit card to improve your financial health

Credit cards are a popular means of payment that have become increasingly necessary in today's society. While it's easy to overspend and get buried in debt, there are smart ways to use your credit card that can help you improve your financial situation.

Whether you are a new credit card user or an existing one, knowing how to use a credit card smartly. 

Let's understand in detail.

Know your credit card terms and conditions
 

It may seem exhaustive and exhausting, but you must read the terms and conditions carefully to know how to use credit cards well. Some of the important terms and conditions include -

· Schedule of charges 
 

It will have a detailed schedule of charges, where you can find out all the possible causes and situations that could cost you money

· Credit limit 
 

Get clarity on the credit limit and cash withdrawal limit offered so that you can use the card within such limits 

· Key dates
 

You will find information on the billing cycle, the payment due date, the interest-free period, bill payment modes, the dispute resolution mechanism, the card company’s contact details, etc.

· Termination clauses
 

Finally, it’s also important to understand the clauses that can make you a defaulter or lead to card termination. Always read the fine print and understand the terms and conditions of your credit card.

Also read - 5 Benefits of credit cards you should know about before getting one 

Follow a budget 
 

You can spend as and where you like but within the credit limit. Here are some tips:

· Being specific about where you want to spend is key to using credit cards smartly

·  You can easily check your credit card expenses to see how much you spend on dining out, shopping for apparel, fuel, etc.

· Consider the offers and discounts offered on the credit card while selecting merchants, brands and platforms to buy from

Disciplined payment of dues
 

One of the smartest ways to use your credit card is to pay off your balance in full each month. This will help you avoid interest charges and keep your credit score in good standing. Additionally, make sure to keep track of your spending and stay within your budget.

· Avoid paying just the minimum amount

· Paying the full outstanding before the due date will spare you from late fees and interest charges. However, you will be charged interest if you pay the minimum amount due only

· Credit cards command one of the highest interest rates on outstanding balances, so full and timely payment is highly recommended

· However, with rates of interest charged by IDFC FIRST Bank Credit Cards being lower than personal loans, you can choose to bear a planned debt against the card

​​Optimise rewards and other credit card benefits 

Another smart way to use your credit card is to take advantage of rewards programs. Many credit cards offer rewards such as cash back, air miles, or discount vouchers. By using your credit card for everyday purchases, you can earn rewards that can be used to save money in the long run.

· If you are using your credit card on POS swipes, online purchases, at fuel pumps etc. make sure that you do so per the reward programs and offers.

· For instance, why order through one food delivery app when the credit card has discounts on another one? Refilling at which fuel pumps get you the fuel surcharge waivers? These are the little things to keep in mind while using credit cards

· Ensure you use your card in a way that you accumulate maximum reward points

· With IDFC FIRST Bank Credit Cards, earning reward points is easier than ever, and they never expire

· You can earn reward points on all online and offline spending. You can make instant payments using the reward points accumulated on your IDFC FIRST Bank Credit Card 

Here is a snapshot of the IDFC FIRST Bank Credit Card reward program

Careful credit utilisation 
 

Only a few people know that the credit limit of a credit card is not to be used to the maximum.

· Using more than 70-80% of the credit limit can adversely affect your credit score. This is because the risk of default increases with higher credit utilisation

· Another way how to use a credit card smartly is to avoid going close to the credit limit within a billing cycle just because you can afford to repay it later

· If you cross the credit limit, you may end up attracting over limit charges instead

Avail balance transfers 
 

You have a way out if you are bleeding money while repaying the outstanding balance on another credit card.

· You can seek a balance transfer with another bank’s credit card

· If you opt for an IDFC FIRST Bank Credit Card balance transfer, you get lower interest rates, minimal processing fees, and flexible tenures

· This makes repayment affordable and more convenient

Prevent unauthorised credit card use
 

In August 2022, it was reported that credit and debit card fraud had doubled in the last two years.

· Make sure you keep your credit card in a safe place, and avoid any paper trails like statements and correspondences

· Never disclose your credit card information in any public forum 

· Review your billing statement and transaction alerts to identify suspicious transactions

· Avoid online transactions from public computers

· Report a lost or stolen credit card to your card issuer immediately

Review credit card statements and credit reports regularly 
 

Reviewing credit card statements regularly will identify suspicious transactions.

· You can identify erroneous charges debited, study spending patterns, and check the correctness of other information in the statement

· You can check if there are any subscriptions you forgot to cancel

· Review your credit statement periodically

· You can detect inaccuracies and incomplete information in them

· If your score has fallen, you can take corrective actions

· Your credit score decides your debt credibility and has a bearing on your credit limit too

Conclusion
 

By following these smart tips for using your credit card, you can take control of your finances and make the most of your credit card benefits.

It’s easier to maximize the benefits of a credit card if you own one by IDFC FIRST Bank. These cards offer industry-best reward points and easy EMI and balance transfers. With transparent charges and attractive interest rates, IDFC FIRST Bank Credit Cards is your first step towards using credit cards smartly.
 

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.