Typically, credit cards are one of the handiest financial tools designed to provide instant monetary convenience. However, it can also land you into an unmanageable debt burden and hamper your creditworthiness if not used responsibly. Thus, borrowers should be aware of both credit card online and offline uses to refrain from staining their profile.
Now, it is entirely on the borrower’s discretion to not only make good use but also maximise its utility. So, here is a list of a few good credit habits that have proven to offer financial advantages to the users.
Make timely bill payments
The first and foremost responsibility that comes with credit cards is repaying the credit used in time. In a busy schedule, there is no surprise that sometimes due dates can be missed. Overlooking the bill payments can accrue expensive credit card interest rates and other penalty fees as well as damage credit history.
Always remember that paying off your credit card money rather than keeping the balance or interest on your credit card is always better. As it will sound better to pay off over the keeping balance to pay extra 9% to 25% for a year as interest on it.
Therefore, borrowers should set their priority to bill payment within the due date, making sure not to skip any of them. Repetitive default payments can hurt the credit profile big time.
Try to pay the total amount due
Monthly credit card statements contain two payable amounts – the minimum amount due and total amount due. While opting for the minimum payment, cardholders can avoid the damage of default payment. Still, they might have to pay additionally as credit card interest charges start accumulating.
Also, it does not portray an appreciable credit handling record. On the other hand, if individuals choose to pay the entire bill amount, not only can they avoid the APRs but also move towards building an excellent credit history.
Optimise the use of the credit limit
While using a card, usually borrowers are aware of spending within the credit limit. However, it is crucial to acknowledge that spending within this limit does not impact the credit history negatively.
The ideal usage should be 30% of the available limit. Such usage can be regarded as a contributor to move towards a good credit record. Also, cardholders should remember that the limit includes both credit card online, offline, and cash withdrawal transactions. Hence, individuals should optimise their card purchase by using it only during emergencies or for necessities.
Check the monthly credit statement
Although chances are less, transactions and billing errors can occur, reflecting a skewed bill amount in your credit card statement. A card holder may overlook these mistakes, which can impact the borrowers’ credit history negatively.
However, individuals can protect their profile by paying attention to the monthly card statements for accuracy. Borrowers should know how to read their credit card statement correctly either online on the issuer website or through email. Any mistakes should be notified to the card provider for correction right away.
Know all the key terms
When availing a new credit card, borrowers should thoroughly read all the key terms related to customer agreement. It helps to know the due dates, reward programs, APRs, etc. Individuals can check these norms from both credit card online as well as offline accounts.
Use a Credit Card Offering Rewards
Just make sure that the card you have chosen and you are making most out of your shopping and other expenses with it, then it could offer you rewards. There are many more companies that offer credit cards with so many rewards like cash back, retail points or miles and others.
There are many credit cards that will provide you the 1% or more as a reward point. There could be a cashback on your purchase with a credit card as well. A lot of rewards you may avail, if you purchase or shop for on a regular basis.
These rewards can be redeemed for travel, cash or shopping. So with this it also suggested to research well for credit card companies and their reviews that what rewards the different different companies are offering and what could be redeem.
Neglect Cash Advances
It is always advisable to avoid the cash advance. Carrying a cash advance over a balance amount is more costlier. The reason behind this is that you will be charged the interest amount from the day you availed the cash until you pay off it.
Use Opportunity to Build Credit History
Building a credit history is not an easy task for a person. For any debt or loans, it’s your credit history that defines how eligible you are to get any loans and how capable you are to pay it off.
In that scenario, if you are a credit card holder, and you know how to keep and use it, then it could be very helpful for you to grasp the opportunity to build your credit history.
If you pay off your balance on a regular basis, then it shows the lender you are a responsible borrower, and eligible to lend any debt.
Report a stolen credit card or fraud immediately
Cardholders should report their stolen or lost cards or any fraudulent or suspicious activities in the account immediately to financiers. Once reported, a card issuer can look into these issues and deactivate the card then and there.
Moreover, card authorities can also suspend transactions on such cards promptly if the user has not made it. Individuals who prefer credit card online purchases must be careful about cyber threats. They should know ways to protect credit cards from being hacked and adopt these measures beforehand.
Moreover, the card issuer also provides pre-approved offers that help to complete the financing process conveniently. These offers are also available on various other financial products like personal loans and business loans. Borrowers can check their pre-approved offer by providing their name and mobile number.
Borrowers should thus be responsible with their credit card online and offline spending. It helps them to manage their credit profile efficiently and earn creditworthiness over time.