Credits cards often prove to be a blessing in the modern day world. Along with the convenience they offer and the ease with which you can use them, credit cards also provide a host of benefits to you. However, like other debt instruments, here too you need to exercise some caution to ensure that you get the most out of your credit card. From opting for the right kind of card to paying off your bills on time, there is indeed a lot that you can do to properly and most profitably manage your credit card in 2016. Read on to know more.
- Get chip cards
Whether you have one or multiple credit cards, you must ensure that they are the highly secure chip and pin cards. Chip cards are equipped with a new safety feature and this makes the card usage a lot safer. So in order to keep your card safe from fraudsters, ask your bank to replace your existing metallic strip cards with the new-age chip cards. While some banks upgrade old cards automatically, others require a formal request from the customer to issue a new card.
- Always be Alert
Whether you are using your new chip card or you are using an old magnetic strip card, always be alert while carrying out credit card transactions. Never reveal your CVV number, pin number or OTP (one time password) to anyone. Do not give out your credit card details to telecallers, even if they claim to be working on behalf of your bank. It is always best to call the bank back and check what the call was regarding. If you are alert when dealing with a credit card, you can reduce the risk of frauds taking place on your card.
- Set Credit Instructions
Many a times, banks and other financial bodies have access to your credit statements which they pass on to other organisations. For example if your credit card is used for transactions exceeding Rs. 2 Lakhs per annum, your credit card company is legally required to report it to the Income Tax Department. Credit scores and credit history data are also collected by banks before they sanction a loan to you. However, this relatively easy availability of your credit record may open the doors for many fraudsters too who may then use such information to their advantage. So read through all loan and credit card agreements carefully and if possible instruct relevant organisations to keep your records private.
- Study the Credit Card Statement
Many of us toss aside the credit card statement when sorting the contents of the mailbox. This is an incorrect practice as ignoring the credit card statement can lead to a number of problems. If there has been a fraudulent transaction, it will reflect in your statement and give you a chance to get it rectified. You must therefore look at each and every transaction featured on your credit card and ensure you are aware of them. If you find any suspicious activity, contact your card issuer immediately.
- Stay Informed
This rule is applicable not just to you, but to your entire family. Educate yourself and the others who may be using your card occasionally about the correct way in which credit cards are used. Everything from card safety to the reward programs must be clearly understood. Gather all the information regarding the best ways to use the credit card as this will make your card more beneficial for you.
- Pay Your Bills on Time
One of the most important things to do when you own a credit card is to pay the bills on time. Unpaid credit card dues can wreck havoc on your credit score and your overall financial health. If you find it difficult to pay off the bills in one particular month, reduce your expenditures the next month so that you can pay off the dues as soon as possible. You can also make advance payments when possible as this will reduce your burden during difficult times.
- Look at the Rewards
When applying for a credit card, you must select a card that provides the best rewards for you. Different cards have different reward schemes. So select the rewards program that suits you the best. If you are a frequent flier, opt for a credit card that has travel related rewards. If you are a shopper, look for a card which features rewards associated with shopping. This strategy will help you maximise your credit card dealings and also prove to be very profitable for you.
- Understand the Added Features of your Credit Card
Even the most alert individual can become a victim of credit card fraud. To offset such risk, most credit card agreements feature sections dedicated to matters such as lost card liability, purchase protection and credit shield. The details of these can be found in the credit card agreement and in case of queries you can always contact the card issuer.
- Become a Valued Customer
The credit card issuers like those customers who deal in large amounts with them. So become your bank’s valued customer by using your credit card often without overspending, and more importantly, pay your card bills on time. Banks often offer discounts and special offers to their valued customers so make sure you call up your bank or check their website from time to time to see if you are eligible for any special offers.
- Set a Limit and Opt for Autopay
One of the wisest ways to manage your credit card is to set a realistic limit on your expenses. Set a monthly expense limit on your card which is sufficient without being too high. This will make you more disciplined and keep your expenses in check. You can also opt for the ‘autopay’ option and instruct your bank to automatically deduct the credit card bill amount from your account every month. If however, you are facing a financial crunch, you may want to think twice before opting for this option.
Keep the key points mentioned above in mind and you will surely be able to manage your credit card better this year. Credit cards are a wonderful modern day asset which you deserve to benefit from.