Credit cards are an excellent method to develop credit score and pay for bills, but they may also be tough to utilize because of all of the doubts and confusions surrounding them. If you’re also one of the credit card users whose head is always jumbled with a lot of questions, this article is just for you. Here, we’ve answered five of the most frequent credit card questions that cardholders usually have in mind.
Should I pay with my credit card or debit card?
A credit card is basically a loan from your line of credit, whereas a debit card immediately withdraws funds from your linked bank account to pay for purchases. For example, if you have Rs.5,000 in your checking account and use a debit card to pay for Rs.200 in groceries, your balance will be Rs.4,800. The withdrawal is reflected instantly in your current balance.
Credit cards, on the other hand, provide a grace period that can last up to eight weeks from the date of purchase until the day your account bill is due. If you do not pay your credit card account balance on time and in full, you will be charged exorbitant interest. Interest will continue to accumulate until the debt is paid in full (unless you have a 0% APR card). With interest accrued on your amount each month, you might end up paying considerably more for whatever things or services you initially purchased.
However, if you are able to pay your complete credit card account balance on time there is nothing to worry about. Apart from the convenience of paying, credit cards provide a slew of other advantages to their holders. Credit cards are more secure and protect consumers from fraudulent activities. Another advantage of having a credit card is that you will receive additional perks such as discounts, cashback and rewards points that can be redeemed for shopping, ticket bookings, hotel reservations and more.
Also Read: What is Credit Card APR?
Should I save my credit card information on a retailer’s website?
Most of the retail websites give you the option to save your information and the psychology behind it is as simple; it gives you the reason and convenience to come back. If the site is secure and you shop at the online retailer often then you can save the information on the website.
However, you must not forget that anything on the internet is never completely safe. If you don’t want the nuisance of getting your data breached in any unknown circumstance then you must avoid saving it online. Also if you’re a frequent shopper and find yourself caught in the web of overspending, you should not store your information on the website. Not entering those numbers makes it too easy for irresponsible shoppers to push the “Buy” button. Therefore, not storing the information will act as a barrier against excessive spending.
Also Read: 8 Tips for Safe Online Shopping When Using Credit Cards
Should I own more than one credit card?
Credit cards are a great financial tool in terms of convenience, building your credit score and earning innumerable reward points when you use them responsibly. People do keep multiple credit cards for different purposes such as for travelling, shopping, dining, etc. But, before toting with multiple credit cards one must determine how many cards are ideally needed and if they can be managed.
If you can manage all the cards responsibly and pay off the monthly balance on time, you can own more than one credit card. But if you’re an undisciplined shopper you may accumulate an exorbitant debt which will negatively impact your credit history and your credit score.
Useful Article : 3 Reasons Why You Should Have More Than One Credit Card
Do I need a credit card receipt?
You may consider the receipts as annoying scraps of paper that litter your wallet but it is necessary to keep a record of all the credit card receipts. In the event of return or exchange of any item, showing credit card receipts will save your time and will make the process prompt.
It is also possible that the cashier mistakenly or frequently adds more amount to your bill. The receipt is the proof against such charges and helps the person to get the refund. You also need the receipt to make a warranty claim on any purchase. Receipts also help in tracking the overall expenditure and maintaining the budget.
How to make the most of my rewards?
It is difficult to choose the best rewarding card as there are many options available in the market. After choosing the best credit card it is important to make the best utilization of the reward programs. The accumulated reward points can be redeemed against various things. Some credit cards offer air miles instead of reward points which can only be utilized for booking flight tickets or hotels.
Banks try to entice you with the cards that come with many rewards but you should always choose the card which is rewarding on the purchases you make often. In short, you must align the rewards with your interest.
As a customer, you must read the fine print thoroughly to optimize your reward points. Reward points would make no sense if you miss out on the credit card bill payment due date and end up paying the heavy interest and penalty for the late payment.
Suggested Read: Best Rewards Credit Cards in India