The credit card‘phenomenon’ was once reserved only for the privileged class. However, the scene has more or less changed at least in metro cities in India. Nowadays, there is an upward trend among the salaried class to opt for the credit card. It is mostly because expenses are on the rise if you are living in a metro city.

Hence, only your salary may not be enough to make some big-ticket purchases and urgent travel bookings and beyond. The added benefit of spreading the cost of transactions over a tenor in easy EMIs also helps you pay hassle-free. As a result, people with credit card eligibility opting for it more as a financial backup.

Even though credit cards come with plenty of benefits, using it smartly is what is needed to keep you protected from falling into a debt trap. If you are a credit card owner and want to use it prudently, then you should go through this post.

Here’s how using your credit card smartly is possible

  • Ask for a higher credit limit from your lender

Even after having the credit card eligibility for a higher credit limit, a majority of applicants don’t apply for it. Why? They fear that having a higher credit limit may temp or lure them towards making unwanted purchases. But, you may not know that having a higher credit limit can improve your Credit Score if you are going to have a lower use. The low usage on a higher credit limit denotes that you are not a credit hungry person. Yes, when credit card companies know that you do not credit hungry, it may work towards improving the CIBIL Score. Needless to say that having a robust Credit Score is the first step towards grabbing future loan approval at a lower rate of interest. Hence, if you are going to have a credit card, ask for a higher credit limit. Existing customers may also increase their limit and indulge in lower usage.

  • Don’t always pay the minimum payment due

Your credit card statement will have two kinds of payment – total amount due and minimum amount due – you at least need to pay the minimum amount due. Paying the minimum amount due should be in the worth case scenario and should not become a habit. It is because the remaining part of your bill will keep coughing up heavy interest till you pay it. Hence, to avoid paying higher interest on the carry forward amount or unpaid amount, you should pay the total amount due per month.

  • Avoid using your credit card at an ATM

Even if you have the credit card eligibility for a card that charges an only processing fee and a lower interest charge on ATM withdrawals, don’t fall into the trap. You can use the credit card at an ATM to withdraw some cash, but that will attract huge charges.

However, some lenders such as Bajaj Finserv offering the Bajaj Finserv RBL Bank SuperCard comes with interest-free cash withdrawal from ATMs for 90 days. You only need to pay a flat 2.5% processing charge. Unless you get such offers, don’t try to use your credit card at an ATM for withdrawing cash.

  • Keep a close watch on joining and renewal charges

Many credit cards that you may be applying for come with the joining and annual or renewal fees. On the other hand, there are many leading lenders whose credit cards are free and also carry no yearly charges. Hence, before availing the credit card facility, it is worth remembering it and checks the fee structure beforehand.

  • Avail a loan against credit card if you need urgent money

Some credit card issuing companies may let you apply for a loan against the credit card at a lower rate when compared with other transactions on the card. You may get the unutilized credit limit on the card left to be your loan amount. There are no formalities and documentation as such deals come pre-approved. You can also pay the loan in EMIs and manage your expenses super easy. It is always better to ask for a loan against credit card than using it at an ATM for withdrawing cash.

Some of the easy steps to help you use the credit card smartly are revealed. If you can implement such tricks, you can use your credit card smartly and hassle-free.

Bajaj Finserv offers pre-approved deals on credit cards, EMI finance, personal loans, housing loans, business loans, doctor loans and many more. It is to simplify the overall loan application procedure and make it faster.

You can submit a few of your basic information such as your name and mobile number to discover your pre-approved loan offers right away.

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