A credit card can be a valuable tool if you know how to use it wisely. Every single penny you spend on a credit card, can earn you points in return which can be used for shopping, travel and other expenditures. However, If you handle your card irresponsibly you can rack up a lot of debt, ruin your credit score and could land in financial troubles. A majority of people are still unaware of the benefits that a credit card offers. Here we have listed down 5 ways on how to maximize the benefits of your card.
Choose the best-suited credit card for you
Before opting a credit card, you must identify the card category you should go for based on your spending habits and patterns. For instance, if you are a frequent shopper, you can opt for a shopping credit card, or if you travel frequently you can consider travel credit cards, or credit cards with hotel memberships or airport lounge access cards. Top credit card categories is listed below:
| Shopping | Travel | Fuel |
| Rewards | Entertainment | Zero Annual Fee |
| Premium | Co-Branded Cards | Secured |
It is also very important to completely know about the card, including its features, reward points, discounts offered, and additional benefits. Thoroughly read the fine print and associated terms and conditions. Based on your reading and comparison with other credit cards, you should make a decision whether the card terms would suit you or not.
Look out for sign-up perks and bonuses
A number of credit cards offer welcome benefits/sign-up bonus when you avail a credit card. These welcome perks can benefit you in a number of ways via reward points, cashback, vouchers, or discounts, that can ultimately help you save a lot. However, note that, not all credit cards offer these benefits. Also, no two credit cards at same fee provide same benefits. Thus, welcome benefits may differ across all credit cards and may or may not be offered.
To maximise the most out of a credit card, you should analyse and compare the credit cards on the basis of welcome benefits offered. For instance, if you are looking for shopping credit cards, then you may compare if any of the cards offer a welcome benefit that would benefit you for your shopping spends. If two cards offer the same type of benefit, lets say, shopping discount vouchers, then you should prefer choosing the card that offer voucher of your preferred shopping brand.
Suggested Read: Top Credit Cards with Best Sign-up/Welcome Bonus
Consider interest-free credit period
Usually the credit cards come with an interest free period which ranges between a period of 20 to 55 days, depending on the type of card chosen. It is advised to choose the card with a long interest-free period so that it becomes easier for you to get adequate money to pay the bill before the payment due date. Choosing a long interest-free credit period can help you manage your credit card bills easily. With a long interest-free period, the frequency of paying bills is reduced.
Suggested Read: How to Manage Interest-free Period in Credit Cards?
Keep a check on your credit score
Credit cards and credit score, impact each other adversely. A credit score is the primary determinant of your credit worthiness and enables you to get a credit card easily. On the other hand, missed or late payments with a credit card can evidently pull your score down, leading to a bad credit history and eventually leading to rejection in credit card application. Hence it is advisable to always keep a check on your credit score. It is significant to keep a check on how much you are spending irrespective of the fact that you possess a high credit limit or not. With a good credit score, you can always upgrade your card and can earn better rewards and benefits.
Suggested Read: Top 4 Factors Affecting Your Credit Score| How Credit Cards Affect your Credit Score?
Track and redeem your reward points
Credit cards with reward points often give you the flexibility of redeeming your points and purchasing something from the bank’s rewards catalogue across different brands. Make sure you utilize them in the right way. The reward points earned from a majority of credit cards expire after a pre-stated period. Hence do ensure to keep a track of your reward points and redeem them before their expiry. The expiry date for reward points may vary across credit card provider and credits cards.
Suggested Read: Credit Card Reward Points
Bottom Line: Maximising benefits out of credit card is one thing, but responsibly handling your card is important. Though, a credit card is a useful tool, yet, ensure that you avail and use your credit card only as per your financial ability and requirements.
