Six Credit Card tips for smart customers
If used responsibly, your Credit Card can be one of the most important financial tools to possess. When your Credit Card bill is paid on-time and consistently, your credit ratings registers a jump. Additionally, you get rewards and offers that help you to save more on your expenses. However, if your Credit Card usage goes out of hand, the accumulated interest might lead you into extensive debt. Here are some tips to avoid such a scenario:
1. Pay-off the balance every month
If you do not want to pay an interest on your Credit Card purchases, always pay off the complete balance in every billing cycle rather than the minimum due amount only. Do not fall for the temptation of spending more than you are capable of paying in a month. This will help you enjoy the benefits of using the Card without paying any additional interest.
2. Let the card meet only your needs
Credit Cards should be used prudently because constant frivolous purchases might lead to serious debt. A Credit Card should be your go to Card during situations like paying an overdue mobile bill before your next payday. A Credit Card can be considered as a type of temporary loan. However, focus on paying the amount back as soon as possible to avoid accruing interest charges.
3. Do not skip your payments
Remember to pay your bills every month, even when you can only afford the minimum payment. Missing payments can lead to interest charges, late fee and a dip in your credit score.
4. Let the Credit Card be a budgeting tool
If you are sure that you can responsibly use your Credit Card and duly pay-off the balance each month, use your Credit Card Statement as a budgeting tool. Pay for all your purchases using your Credit Card so that you can note down the exact amount spent throughout the month. However, you should do this only when you are confident that you will be able to pay-off the balance every month.
5. Look out for Credit Card offers & rewards
While using your Credit Card for all or most of your purchases, it is a good idea to go for a Card that has offers and rewards. It will not only benefit you to secure a better value for money but also give you lucrative rewards like cashback, retail points and more.
6. Keep your spends below 30% of the total Credit Card limit
A good way to have a healthy credit score is to keep the credit utilisation ratio below 30%. The credit utilisation ratio refers to the percentage of the total available credit being used. For example, if you have a Credit Card limit of Rs 1,00,000, you need to keep your expenditure below Rs 30,000.
When used right, a Credit Card can only mean good things for your finances. For instance, with your ICICI Bank Credit Card, you can avail exclusive dining offers, Reward Points and even save on fuel surcharge. Whether you love online shopping or are a frequent traveller, ICICI Bank’s Credit Cards are suitable for your every need.
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