Things To Remember Before Swiping Credit Card

The role of paper money has been replaced by credit cards at present time. These plastic cards have completely changed the way of purchases and sales. The number of credit card sales and usage has increased dramatically since the Indian government announced the “demonetization” action a few years ago. According to some reports by the Reserve Bank of India, Indians are heavily focusing on credit cards to pay off debt. Credit Cards can truly be very advantageous, but improperly using them can make you fall into a debt trap too. In this article, let us understand what are some important things to remember before you swipe your credit card:

Precautions to take before using a credit card

Planning a budget

Using a credit card can be confusing, especially once you start using it for purchases. Most of them provide short-term interest-free credit, which allows you to make impulsive purchases if you don’t have a planned budget. Sometimes when you indulge in mindless spending, you often lose sight of your repayment strategy. Therefore, it would be a good idea to budget your expenses before using all of that money.

Check Interest and Charges for cash withdrawals

The majority of credit cards have a cash withdrawal feature. While this is convenient, there are always hidden terms and conditions attached, so it is important to go through and make plans before using it. Thus, not only cash withdrawals but all the other charges should be checked before using the card.

Be Updated With Discounts and offers

The majority of credit card issuers offer specific promotional programs that include cashback and reward points. Such offerings can be discounts at restaurants, theaters, or other payback schemes. While they may seem very attractive at first glance, it is always recommended to read these offers carefully to determine whether they are valuable to you. Once you are confident with all the terms and conditions then only you should move forward.

Credit Score and Bill payments of a Credit card

A credit score is a three-digit number that analyzes the condition of your debt and repayments. It is a kind of signal that shows how responsibly you pay off all of your debts. If a cardholder doesn’t pay their credit card bills on time, then their CIBIL Score could suffer and if their credit score is weak then they may not be approved for bank loans. In many other nations, a higher credit score is commonly associated with a better standard of living, whereas in India, it helps you qualify for lower interest rates and an easier application process.

Options for EMI payments

Every credit card offers the choice of EMI payments. When you’ve made a significantly large purchase then this choice could appear to be a good one. Having the EMI option gives the ability to pay the entire amount in smaller installments. It not only helps you with budgeting, but it also brings down interest rates. EMIs are a big assistance when it comes to appropriate expense planning.

Bottom Line:

Credit Cards are widely used and are very popular. But misuse of them can be damaging. They also come with various deals and discounts on food, fuel, shopping, and other services. Using a credit card responsibly can improve the customer’s credit report. If not, then users might get trapped in a debt cycle which is difficult to escape. Before using a credit card, look into all the methods by which you may increase your rewards. We hope all the above tips have provided you some insight into a consideration to make before swiping credit cards.

Additional Reading: How To Redeem Rewards Points In HDFC Credit Cards