One of the quickest and most convenient methods to shop without thinking about money is using the best credit card in India. The third quarter of 2018 saw a record number of customers (36.7 million) with access to a bank card, according to the TransUnion CIBIL Industry Insights Report. This represented a year-over-year increase of 31.7%. (YoY).
Lenders are eager to provide customers with credit cards in response to this rising demand. A credit card is more than just a piece of plastic; it gives you immediate, easy access to credit, which is invaluable in an unexpected financial crisis. Maintaining a high CIBIL Score takes time, careful use, and timely payments. Credit limit increases are a perk offered by many lenders to customers who have proven themselves responsible with money.
The six ways you can use your credit card for optimum credit score are
Choose the correct type of credit card –
There are many options available, so shop around. To what extent would you use a co-branded reward card? Too many credit cards can hurt your credit score because it increases your credit exposure and debt load. Instead of carrying around a wallet full of credit cards, use one or two that will help you build credit and earn rewards with every purchase you make.
Consider the credit utilisation limit –
You should, however, use your criteria to select a card and a limit that is both reasonable, given your income and repayment capacity. Using up to 30% of your available credit at any given time is recommended for credit card users. Do credit card apply online from the comfort of your home, taking care of the utilisation as per your budget.
Plan, purchase, and forecast card expenses –
Think about upcoming big-ticket purchases like electronics and home furnishings. Depending on the interest rate, a durable consumer loan may be better than charging the purchase on a credit card. Although interest rates vary from lender to lender, they are typically much lower than the rates charged on credit card balances. Maintaining your available credit on a credit card is essential in case of an unexpected expense.
Opt for 0% interest-charged credit cards –
Suppose you plan on making a sizable purchase or taking a trip within the next few months (within your card’s spending limits, of course). With a credit card that charges no interest, you can make large purchases on various online marketplaces like Amazon and eBay and pay for them in monthly instalments (EMIs) with no interest at all. It’s less of a hassle to pay back, and there’s less of a chance of missing a payment, both of which are good for your credit. Make sure there are no annual, processing, or transfer fees associated with the “zero per cent interest” card by reading the fine print.
Keep an eye on your inbox –
For marketing communications from your credit card company, banks often send out notices of enticing promotions during major holidays and celebrations, including lower interest rates and cash rewards. You can save money using your credit card if you do your research, make an informed decision, and book in advance. As long as you are responsible and pay off your balance in full and on time, using the best credit card in India wisely can help you establish a positive credit history.
Pay the total amount due on time every single time –
Credit card bills typically have a 45-day grace period during which the entire balance can be paid, but you should always pay the balance in full by the due date. If you only make the minimum payment required or make no payment by the due date, the interest rate in effect at the time will be applied to your balance owed.
Any time a payment is made, it is deducted from the total amount owed on the original purchase. When that is fixed, the process will proceed to the subsequent acquisition. In a nutshell, it uses the FIFO order of priority. If you have a credit card bill of Rs 10,000 and are only paying the minimum payment of Rs 500 per month, it could take up to three years to pay it off.
Other Important Tips for optimum credit score are
- Limit your use of credit to at most 30% of your total available credit
- Payments should be made without delay to maintain a good credit score and avoid late fees
- If you’re trying to improve your credit score, you should open only a few new credit accounts simultaneously
- Ensure any mistakes on your credit report are corrected as soon as possible to avoid hurting your score
- Use your credit cards regularly, even if it’s just for small purchases, to keep the accounts active
Credit cards can help you establish or improve your credit history and score if used responsibly. Use credit cards responsibly to improve your credit score and always pay your bill on time.