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Sunday, September 15, 2019

5 Things to Know About Your Credit Card


Credit cards are an ideal way to cater to urgent financial needs both personal and professional. You also get to enjoy reward points, discounts, cashback, and several other offers that debit cards don’t offer. To make the most out of your credit card make sure to study its benefits and features before you apply.
You only have to know about a few things before you apply for a credit card. Some of these are mentioned below:
1.      Interest rate- If you want to know how to use a credit card properly, you should understand how your lender calculates the interest. No interest is applied to your credit until you fail to repay your debt within the grace period. A grace period of 45 days is given to you to pay the same. This grace period includes one month billing period and is stretched to another 15 days after the arrival of your bill. Thus, if you want to know how to reduce your credit card interest and save money, make sure to pay your dues on time.

2.      Late payment fees- Paying your debts late will pull in complications and increase your bill; however, there can be times when your punctuality takes a backseat. While you apply for a credit card, make sure to inquire about the late-payment fees. Also, avoiding late payment will help you maintain a good CIBIL score.

3.      Reward points- Every time you use your credit card, rewards in the form of reward points will be provided to you. Once you know how to use a credit card properly, there are a lot of things to do with your credit card reward points such as availing discounts on flight tickets, electronic devices, mobile recharge, hotel bookings, etc.

4.      Total amount due- The most important pointer on how to use a credit card is to pay the total outstanding amount due on your credit card instead of the minimum amount due as mentioned in the statement. If you are compelled to pay the minimum amount instead, the difference between these two amounts will be added to your next statement including interest. Paying the total outstanding will not only help you avoid the interest but also increase your credit score with every such payment you make.
5.      Annual fee- The annual rates vary from lender to lender. However, always inquire about the yearly fee that your lender charges before you apply for a credit card. Try to go for a lender who charges no annual fees to reduce the burden of debt.

Several financial institutions and NBFCs provide credit cards with other benefits such as signing-up bonuses, easy EMIs, robust security, etc. Bajaj Finserv is such an NBFC that has introduced Bajaj Finserv RBL Bank SuperCard which provide unique benefits such as emergency loan availability, interest-free cash withdrawal from ATMs, instant approval with minimal documentation, etc.
Make sure to set your limit to avoid over-usage of your credit card.  Also, do restrict yourself from using too many credit cards at once. Using too many cards at the same time will result in losing a track on your due amount and due date, which can make you default on payments. Try to meet the total outstanding as per your monthly statements with proper financial planning.

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