Credit cards have become an omnipresent financial tool for the modern society. The convenience to purchase something and pay later attracts many to use a credit card for most of their expenditures. On top of that, most financial institutions run loyalty programs that offer a substantial amount of credit card reward points as you keep using your cards.
Using a feature-rich credit card and its accumulated points wisely can give you various benefits like cash-backs, complimentary airport lounge access, etc. It can also help you build a good CIBIL score, which will make you more creditworthy and help you secure a loan in future.
So, lets’ take a look at some tips and tricks to use a best credit card in india and its reward points wisely.
How to use a credit card –
Keep an eye on the card statement – The credit card statement will show all your monthly transactions with a particular credit card. Keeping an eye on a card statement is the only way to ensure no clerical error or fraudulent activity is happening with your account.
Tip – Always remember to check a few essential things on the statement like available balance, due payment and due date, total interest and fees paid, and credit card reward points You can also put a tag on your spending pattern by checking the summary of debits.
Spend in small amounts and repay within the due date – One of the fundamental rules of using credit cards is to keep your expenses within a limit. Do not buy anything that you will not be able to pay up come the end of the month or within the next billing cycle. Paying within the due date will also improve your credit score as you build a history of timely repayments.
Tip – Always remember to use the interest-free period wisely. Ideally, you should make a purchase at the very beginning of your card’s billing cycle. For example, if your cards bill is generated on the 10th of February, and you buy something on the 11th of that month, it will reflect on the next statement. You will enjoy an interest-free period until the end of the next month. This is a significant way of saving a lot of money on interest.
Automate the repayment process – You can automate the bill paying process to eliminate the hassle of making monthly payments for your card. Schemes like NACH (National Automated Clearing House) can help you automate the requisite transactions electronically. Once you link your savings or current account with the NACH facility to your credit card account, the due amount will be deducted automatically from your account.
Tip – Remember to maintain a minimum balance in your savings or current account if you are using the NACH facility. Not doing so will invite penalty charges from your credit card provider other than harming your CIBIL.
How to redeem the reward points –
Cash-back or cash conversion – If you want to know how to use credit card for shopping while gaining maximum benefits, you can look into cashback offers. It is an excellent option for frequent shoppers where the lender will return a certain percentage of the amount spent back to your credit card account. You can also opt to exchange the points for hard cash.
Tip – Find a retailer who has tie-ups with your financial institution to earn the best cashbacks in exchange of your accumulated credit card reward points.
Convert into travel miles – You can also convert the reward points into travel miles. Various airlines, hotels and travel agencies offer special discounts and additional services under this loyalty program. These benefits can range from a small discount on tickets to an almost all-paid vacation.
Tip – Choose a financial institution that offers the maximum number of benefits under their loyalty program. Companies like Bajaj Finserv provides complimentary airport lounge access for up to 8 times with the Bajaj Finserv RBL Bank SuperCard.You will also get a handsome amount of reward points (up to 20,000) as a welcome gift upon signing up. The SuperCard merges the benefits of 4 different types of cards in one, bringing various industry-first features at your fingertips.
Bajaj Finserv also has pre-approved offers for credit cards, personal loan, home loan, business loans, and a range of other financial products and services. These offers help save you time by simplifying the process of availing finances. You only have to provide some details online and check your pre-approved offer.Careful use of credit cards and credit card reward points can help you save money on the long run, as well as build a good credit history and CIBIL score. Stick to some of these smart tips and tricks to get the best out of your credit card.