Your First Credit Card? Here are some smart ways to use it

Getting your first credit card is like a milestone in your financially independent life. With so many issuers offering a credit card online, the process has also become a lot easier. When you use your credit card wisely, you can not only earn attractive rewards on each spend, you also build your credit history. The latter proves helpful when you need to apply for a loan for your financial goals. However, the caveat still remains – using the card wisely. How can you do that?

You don't have to scratch your head. Here are some smart and effective ways of using your card the right way:

Get the "Right" card for you
 

There are different types of credit cards available in the market – lifestyle cards, shopping cards, travel cards, premium cards, etc. Pick a card depending on your spending habits. It is essential as the reward structure depends on the card you use. For example, if you are looking for exclusive access to airport lounges, the ideal card would be IDFC FIRST Wealth Credit Card. However, if you commute to work every day in your car, maybe IDFC FIRST Classic Credit Card would best suit you as the card offers a 1% fuel surcharge waiver. 

Tip: Assess your spending pattern and then pick a card that can give you the maximum rewards on each spend. The reward points could be redeemed for additional benefits and discounts.

Understand the reward structure
 

To unlock the reward potential, understand the reward structure of your card. Find out the welcome benefits, spend-based earnings, reward points accumulation and redemption, bonus, etc. Thereafter, ensure that you use the maximum rewards that your card has to offer for value-added benefits. With an IDFC FIRST Bank Credit Card, you get up to 10x reward points that do not expire and can be redeemed anytime. Plus, there are no caps on how many reward points you can earn. 

Tip: Ensure you maximise the reward structure by making timely payments and redeeming the points on time.

Understand the charge structure
 

There's nothing like a free credit card. Most credit cards in the industry comes with its set of charges, including a joining and annual charge. If you opt for IDFC FIRST Bank Credit Cards then you will get Life time free Credit Cards. However, make sure you understand all the other charges that come with any credit card, especially the interest charges, late payment charges, over limit charges, etc. Make note of charges like forex markup, cash advance fees as well. Find the cards with lowest of these charges like the forex mark-up for international transactions is only 1.5% in IDFC FIRST Wealth Credit Card and 1.99% in IDFC FIRST Select Credit Card.

Tip: Choose a card with minimal charges and avoid transactions that incur a charge.

Be a stickler with bill payments
 

Credit card bills are payable within a specified time. Make sure that you pay the bill in full every time. Making full payments builds up a good credit score and saves you from high-interest charges and late payment fines.

Avoid withdrawing cash (unless you have to)
 

Credit cards allow the facility of cash withdrawals from ATMs. However, use it sparingly as cash withdrawals incur a charge and the withdrawn money also attracts interest. In fact, even though IDFC FIRST Bank Credit Cards allows you to withdraw cash from ATMs at 0% interest, it is advisable only to use it when there is an emergency.

Use these tips and use your credit card wisely. You would be able to earn attractive reward points and also build up your credit score, one month at a time.

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.