5 credit card tips for smart users
Credit cards, when used carefully can be a helpful financial tool. You can boost your credit ratings by making regular monthly payments of the entire outstanding balance. On the other hand, allowing your credit card spending to spiral out of control will adversely affect your finances and credit rating.Here are a few tips to make smart use of your credit cards:
1. Address your needs, not wants.
Use the credit card as a temporary loan to yourself, and then pay back the amount as soon you can to avoid interest charges. Having to pay off the mobile phone bill before your pay day is a good example of a need. Frivolous purchases, which are not absolutely essential for your life can be considered as wants.
2. Use the credit card as a budgeting tool.
If you are clear about using the credit cards only for needs, then you can try using it as a budgeting tool. By making all of your purchases with your credit card, you can see exactly how much you’ve spent at the end of the month. However, make sure your credit card spending doesn’t exceed your bank balance.
3. Pay off your balance every month.
You can use your credit card as a budgeting tool only if you pay off your entire balance every month. Paying off the total balance every month can help you enjoy the benefits of using a credit card without interest charges.
4. Auto debit.
There is no use of spending wisely, if you forget to pay your bills on time. It is a beneficial practice to opt for an auto debit. Once you set up auto debit instructions on your savings account, your credit card bill will be taken care of automatically. Technology will do the hard work for you.
5. Get EMI friendly.
With a Credit Card, you can purchase big-ticket items in one swipe and then break up the sum into EMIs by accessing your net banking account or calling up the customer care service of your bank. It is a simple process. Buying things on EMI is good for your finances. Repaying your EMIs on time helps your Credit Score. Moreover, paying in EMIs for goods and items you need helps you maintain liquidity. This will save you the pain of experiencing a cash crunch. After all, you need money to pay for your investments and daily expenses.
Credit cards are a helpful financial tool, with many obvious benefits. Use it wisely to enjoy the benefits and avoid the pitfalls.
For more, visit Citi Help, the one - stop destination for all your queries.