Credit card usage in India has witnessed a 30% boost in the fiscal year 2019 from the previous year, according to a report presented by The Economic Times. In the financial year 2018-19, transactions worth Rs.6 lakh crore via credit cards were noted, an Rs.1.4 lakh crore increase over the previous year. The data indicates a boost in customers who use credit cards for shopping either online or at POS terminals.
However, the lack of knowledge about the smart usage of credit cards can be a factor that may impact one’s shopping experience. With these smart tips in mind, customers will be well equipped to make smart decisions about their credit cards.
Tips for smart utilization of credit card while shopping
These tips will come handy for customers who are frequent shoppers and make payments via credit card.
Choose a card according to spending habits
Since each credit card offers a distinct set of discounts and cashback offers to its users, choosing one according to the spending habit is a wise financial decision. For instance, some cards let customers avail regular cashback with fuel purchase while another offers complimentary airport lounge access and reward points for air miles traveled. Consequently, a frequent air flight traveler will avail benefits in the latter case while the frequent commuter will make the most with the former credit card variant.
Don’t exhaust credit limit
The credit card utilization ratio denotes the ratio of the amount utilized from the predetermined credit limit. It is considered wise not to exceed the utilization beyond 60% to ensure they can conveniently pay the bill on time and meanwhile keep their CIBIL score healthy. The exhausting available credit limits may lead to negative scenarios like reduction in a credit limit that can affect the customer’s shopping experience.
Plan big purchases towards the beginning of the billing cycle
Customers with shopping credit cards can benefit from the additional repayment period provided by card issuers, known as the grace period. Although the period offered varies between financers, up to 20 more days over the 30-day billing period can be availed by leading financers.
Purchases made right at the start of a billing cycle can help with a long period to easily repay the availed credit.
Credit cards like the Bajaj Finserv RBL Bank SuperCard offer a repayment period of 50 days including the grace period. Customers might make payments within the 30-day billing period, if not; they have an extra 20 days to repay the credit availed.
Pay credit card bills in full and on time
It is advised to always pay the bills in full and on time so that they don’t have to pay interest or penalty. Paying only the minimum due will attract interest charges on the remainder outstanding, increasing your financial liabilities.
Redeem reward points and avail cashbacks
Shoppers can accumulate reward points for each of their eligible purchases that can be later redeemed. Nevertheless, they should know how to redeem credit card reward points to best benefit from the credit card. Note that these points come with an expiry period as well.
Convert big purchases into easy EMIs
Customers can convert their credit card purchases into easy EMIs and pay conveniently. This reduces their financial burden as the total cost of the product is converted into EMIs that can be easily paid by the lender.
Apart from these, customers can avail emergency loans as well that can be used for purchase or payment in emergency cases.
It is thus vital to credit card apply after considering the features offered on the card and checking whether they match with your credit requirements.
Further, non-banking financial companies like Bajaj Finserv provide pre-approved offers to existing customers to help make the loan application procedure simpler. Such offers are available on several financial products including business loans, personal loans, home loans, along with others. Check out your pre-approved offer instantly by providing only your name and contact number.
Customers who use credit cards for shopping can make use of these tips to avail cash backs, earn reward points, and smartly maximise the benefits from the card while shopping. Opt for leading financers to avail a card which can help you benefit from it holistically.