India has increased to a INR 21111.41 billion economy in the first 3 months of FY 2019 from INR 20615.29 billion in the last 3 months of 2018. This increase has proved to be an advantage for the credit card providers. People tend to purchase more when using a credit card owing to its features and benefits. Also, your credit card can help you maintain a good credit score if used properly.
However, your credit card can be a burden on you if you do not pay its dues on time. Therefore, its essential to pay up your total due amount every month and minimize the chances of defaulting and avoid hefty penal charges.
Here are some money-saving tips on how to use a credit card –
Tip 1: Make a budget-
Create a daily budget for yourself over which you should not spend. Once you have an explicit knowledge of how much you can spend and how much you earn, you will be able to track your savings. There are several tips on how to use a credit card, such as budget planning before using your card, paying your dues on time, etc. Following a budget even while using a credit card will prevent you from overusing your card, and you will be able to avoid the burden of excess debts.
Tip 2: The 50-30-20 rule-
The 50-30-20 rule is a concept where you spend 50% of your earnings to daily necessities such as food, bills, rent, etc. The 30% of your earnings goes to your entertainment while the rest of the 20% goes to your savings. This savings can help you pay your credit card dues on time and earn credit card points that you can use later on.
Tip 3: Limit credit card usage-
To never default a payment, make sure you limit the usage of your credit card. One of the most essential tips on how to use a credit card and how to repay your credit card debt is to restrict you from over-usage. Refrain from making a transaction which will push you beyond your pre-determined budget. Set your credit limit and stick to it!
Tip 4: Cost cutting-
Restrict yourself from spending unnecessarily and also track your expenses. Analyse the areas where you can reduce your expenditures and which areas you have to increase. Also, one of the most vital tips on how to use a credit card is to pay your dues before making a second transaction. This will help reduce your credit card interest and save money.
Tip 5: Redeem credit card rewards points-
Every time you use your card, you will receive credit card points. These points can be redeemed while you make a transaction using the card which in-turn reduces your due amount. However, every type of transaction will have different reward points, such as, some credit cards offer higher reward points on online transaction and lower reward points for offline transactions and vice-versa. Thus, inquire about the rate of reward points on transactions and use your credit card accordingly.
Several financial institutions and NBFCs provide credit cards with sign up bonus and additional rewards. Bajaj Finserv offers the Bajaj Finserv RBL Bank SuperCard that comes with unique benefits such as zero interest rate emergency loans up to 90 days, interest-free ATM cash withdrawal up to 50 days, instant approval with minimum documentation, affordable interest rate, late payment fees, annual fees, attractive credit card points, EMI conversion facility, etc.
Bajaj Finserv also provides pre-approved offers on credit cards to make the application process hassle-free. This pre-approved offer is also available on secured loans like home loans and unsecured loans like business loans and personal loans. You can check your pre-approved offer by providing minimal details like your name and your phone number.
Nonetheless, there are several other steps that you can follow to save some money every month so that you never default on a payment. However, saving money not only helps you clear your credit card debt but also supports at the time of financial crisis and urgent cash crunches.