Credit Card Simplified
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| Credit Card Simplified |
Credit card may give an image of
joy or fear. It can be good or bad. But if you keep reading you may find out
that having a credit card is helpful.
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Credit card is given to a person by a bank as a
privilege. Bank keeps in mind your salary and debt to income ratio to set your
credit card limit. The higher your debt the lower your limit.
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Bank provides you a credit card as a benefit to
you and their services. Credit card is a short loan provided to you to afford
things which you could not purchase on debit card.
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This increases banks brand and earn extra money
in case you miss your payments on time. But if you pay your payments up-to-date
then you have no interest charges and you have what you wanted to purchase.
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My advice is that you check your statement and
make your full amount payment for every transaction made in that month to avoid
interest charges.
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If you're single transaction is a huge amount,
you can request your bank to convert it into EMI and so there is no burden in
paying the full amount.
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Use your credit card after you receive your
statement. That way last minute transactions don't add up right before your
statement arrives.
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Don't max out your card but use 70% of the limit
to maintain a good credit score. That way bank knows you can manage your
expenses without too much debt.
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Don't forget to convert reward points earned on
your card into products or cash as per bank's policy.
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Another benefit of credit card is that they come
with discounts and offers. Offers on movie tickets, weekend restaurant discounts
or for traveling on holiday with flight discounts.
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It can be a benefit while you take a mortgage to
reduce the interest rate based on your credit score.
Tip of the day: Get the app SMS ORGANISER on your phone to keep a track on
your card’s usage and payment reminder. It can even inform you of your travel
date.
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