The invention of credit cards was a huge leap forward for people. People all over the world use their credit cards for all kinds of purchases and payments. The credit cards give the people the freedom to buy whatever they want without having to depend on their bank balance. Credit cards are used by all kinds of people in cities all over the world. It is a fact that a credit card can be a boon as well as a runway at the same time.
Sometimes people do not know how to effectively manage their credit cards. Therefore, their credit rating is severely affected and they find it difficult to obtain financial assistance from banks and other lenders. To make sure your credit score is not affected, you need to effectively manage your cards. You need to be careful about making payments and using the card for any purchase.
When you make your credit card payments on time, your credit score improves and you can get a higher credit amount. On the other hand, if you fail to make payments on time, your credit value will be adversely affected and you may not receive additional credit from financial institutions. Here are a few important tips to help you effectively manage your credit cards:
1. Plan your purchases – Before buying or buying a product, you must decide whether it is necessary to buy it. You need to make a list of your priorities and stick to it so you can arrange the money needed to pay your credit card bills. At all times, make sure you are not buying anything too expensive as it will cause you to cross your monthly budget or credit limit on your card.
An effective way to plan your purchases is to make a shopping list. At the beginning of the month, try to make a list of things you need to buy with the card and stick to the list as much as possible.
2. Always check your statements – Check your statements monthly as the statements help you understand your consumption pattern. Based on your observation, try to avoid unnecessary purchases. Checking statements will also help you know the minimum payment to be paid for a particular month so you can make that payment on time and avoid any extra fees or fees.
You can easily check your statements online and you can also use your smartphones to keep track of your card usage. Mobile alerts can be very useful to make sure you don’t end up paying more than you need when using your credit card for any transaction.
3. Try to make full payment – Try to make full payments whenever possible. When you pay your credit cards in full and within the due date, you do not have to pay any interest on the invoiced amount. In addition, payment of credit card balance will fully help improve your credit score. Even if you are unable to pay your credit card balance in full, always make sure you pay the minimum amount due within the due date.
Apart from saving a significant amount of interest, you will also be able to improve your credit score and increase your chances of getting more credit in the future.
4. Keep track of additional cards – Sometimes you may forget the fact that you have provided additional cards to your family members and these cards are linked to your credit card account. The way these cards are used can affect your credit card account. Therefore, you should keep track of them and also ensure that the transactions completed with them are paid by the due date.
In addition, you must also keep track of these cards to ensure that the credit card limit is not exceeded. If it is exceeded, you will end up paying a surcharge fee and other large fees.
5. Look for promotional offers – Why pay more when you can get the same product by paying less? Be a little smart when using your plastic money, and be sure to use the various offers and promotions that card issuers provide from time to time. These promotions can give you access to discounts, offers and privileges across different segments such as dining, traveling, shopping and so on.
Not only can you save money through these promotional offers, but you can also enjoy a number of other exclusive privileges that will enhance your experience of using a credit card. Make sure you always visit a site where you can find information about such campaigns so you can take full advantage of them.
6. Make multiple payments in one month – Don’t just limit yourself to making a single payment by the payment date each month. Instead, make multiple payments even if you pay small amounts. It has been observed that credit card issuers and credit bureaus tend to send payment reports more than once each month if there is a lot of payment activity in an account.
When making multiple payments, make sure that the many positive information about your credit card usage is sent to the credit bureau, and in the process, your credit score gets a big boost. For example, if the minimum payment to be paid for the month is S $ 1500, you will need to make a payment of S $ 1500 and, apart from this, also make other amounts in the same month.
7. Avoid cash advances – You will get the equipment to withdraw cash with your credit card, but you should avoid using this feature. When you withdraw cash with your card, you will be charged a cash advance and you will also not receive any interest-free period to make the payment.
Cash advances increase your overdue minimum payment and the total balance on your card and will make it difficult to pay off the balance in full. It can also have a very negative effect on your credit score, so it is important that you try to avoid cash advances as much as possible.