Reports by the Financial Express state that around 15 million credit cards are being issued in India every year!
From enabling digital to contactless transactions to smart usage of cash to smoothening the flow of day-to-day expenses, a credit card does all these essential things for you, and then some.
Though credit cards may offer great convenience, any misuse or lack of awareness may lead to high charges or dents on your creditworthiness.
Therefore, you should know the art of maximising your overall benefits when you decide to avail the services of a credit card.
Read on to know about the functioning of a credit card while maximising your overall benefits!
How a Credit Card Works
A credit card is a straightforward and simple tool for making online purchases and meeting daily expenses. When you use your credit card, your details are sent to the merchant’s bank.
By getting authorisation from a credit card network, the card issuer verifies all the required information to either approve or decline a particular transaction.
If your transaction gets approved, the payment will be made to the required merchant, and the available credit from your card gets reduced from the account. After the end of a billing cycle, a card issuer sends the statement that shows all the transactions for that month alongside your previous and new balances.
You will also get a grace period which is represented as the period between the purchase date and the due date that is listed on a statement. So, if you pay your bill on or before the due date, no interest charges get accrued.
However, if you carry the balance from month to month, a card issuer will charge the credit card interest. The annual interest rate of your credit card shows the cost of the balance annually. APR combines both the interest rate and other costs like annual fees. This is generally tied to the prime rate that may change from time to time.
How to Maximise the Benefits of Your Credit Card?
With optimal usage and by following some smart tips, you can reap the maximum benefits from your credit card.
Below we have mentioned some of the tips that will assist you in using a credit card in an efficient way.
Choose the Card Appropriately
A bank always tries to reach out to new customers for the issuance of a credit card. Moreover, customers are also in search of the best credit cards in India that offer them desired features and benefits.
For instance, if you travel a lot, you can pick a travel credit card that offers the facility of maximum airport lounges alongside some frequent flyer points. These points can be accumulated anytime you need them.
Similarly, if you dine out on a regular basis, pick a card that offers several discounts and rewards.
Earn Maximum Benefits with your Card Spends
Often users don’t pay much attention to the benefits that a credit card has to offer. You can optimise your card spending if you have used your card for the desired purpose.
A credit card that incentivises the benefits of online grocery or utility spending would be preferable for people in today’s time. By using your card, ideally, you can reap maximum benefits and enhance your purchasing power.
Consider Various Additional Deals
Besides providing certain core benefits, you can get some of the additional benefits like reward points, cashback, and discounts. There are credit cards that offer additional deals like travel bonuses or various facilities while making a purchase or incurring an expense. This will help you reap the maximum benefits from your credit card.
Redeem all Rewards Before Expiry
You need to use your card wisely and accumulate the desired reward points. The next step would be to ensure that you need to redeem certain points before they can expire.
Therefore, many credit card holders don’t track your reward points regularly. In this case, the reward points may expire. This would be a type of a failed opportunity. You should monitor your loyalty account regularly and use the card before it expires.
Paying the Annual Fees
Most people usually favour the normal annual fee cards. Though, the cards that charge fees will provide some additional benefits and rewards. But before rejecting a card because of the fee charged on it, check what you will get in return.
These can be in the form of joining gifts or bonus reward points. They will help you get the maximum reward of all the purchases you will make and get maximum perk from your credit card.
To Earn Extra Miles Shop through Portals
Another alternative to earn any bonus miles and points to utilise a shopping portal for making any online purchase. Most of the bank reward and airline programs feature shopping portals.
To create an account, click through the website where you want to make an online purchase. The shopping portal keeps the record of a purchase via cookies to earn extra miles from all the purchases that you make.
Strategically Time All the Large Purchases
When you think of buying the best credit cards in India for a large purchase, you need to use these cards strategically.
You can time an upcoming big purchase in an ideal way to earn maximum benefits from your card. If you know you want to spend on buying furniture or a new car, you can easily apply for a new credit card.
Moreover, you can also time your purchases with the help of bonus categories. You can wait until the quarter to fulfil your purchase on time.
Wrapping Up
Keep all these essential pointers in mind if you want to get most from your credit cards. If you are still apprehensive about putting your expenses through these cards, these pointers will guide you better.
