In 2018-19, India recorded around 1.7 billion credit card transactions. In 2015-16, this number was less than half at just 800 million.
Nevertheless, the propensity to spend more using credit cards has also led to a dramatic increase in debt. Financial institutions will impose credit card interest rates on the dues on a daily basis, which will further enlarge their debt.
Hence, it is advisable for customers to keep a few things in mind when using their credit cards, especially when shopping for groceries and essentials.
Things to keep in mind while expending through credit cards
Whether you use the card to purchase ordinary items such as groceries or consumer durable products, here are a few factors that you must remember while using these cards.
- Credit limit
Each card comes with a specified spending limit, which cardholders cannot exceed. For example, if the credit limit on a particular card is Rs.5 lakh, the card owner can spend up to this amount in one billing cycle.
The limit is restored whenever you repay the entire sum. Nevertheless, if you fail to repay the amount, the credit card issuer restricts further usage of this card until repayment.
- Billing cycle
One of the tips to get the most out of your credit card is to keep the billing cycle in mind. Individuals should try to limit all big-ticket purchases to the initial stages of the billing cycle. Doing so ensures that they have enough time to arrange the funds necessary to pay off the outstanding sum before the next cycle starts.
Failure to repay the dues on time can lead to credit card interest rates being levied on your expenses, further complicating repayment.
- Redeeming reward points at regular intervals
Regular credit card usage allows individuals to earn reward points. These points can lead to discounts and other benefits at certain outlets.
Nevertheless, such reward points have an expiry date. Failure to use the points within this time will prevent you from utilizing the various benefits that such rewards have to offer. Make sure you also know how to redeem your credit card reward points.
- Limit credit card usage
Unrestrained credit card usage can overburden your finances, making you unable to repay the debt in time. Thus, if you want to avoid the steep credit card interest rates, spend only as much as you can pay within a billing cycle.
Spending excessively can hamper not only your track record with the credit card issuing company but also your credit score.
- Never withdraw cash using credit cards
Amid liquidity shortage, one may feel drawn to withdraw cash from an ATM using his/her credit card. Nevertheless, doing so can severely increase your repayment burden.
Most cards do not offer any interest-free period on such cash withdrawals. Thus, card providers charge interest from the next day until the day you repay this due.
Premium cards, like the Bajaj Finserv RBL Bank SuperCard, offers 50 days of zero-interest cash withdrawal from ATMs. Additionally, this card boasts several other attractive features and benefits.
The company also has an online credit card application process, which makes it even more convenient to avail.
Bajaj Finserv provides pre-approved offers to simplify and accelerate the credit card application process. These offers are available on a range of financial products, including personal loans, business loans, and more. You can check your pre-approved offers by submitting your phone number and full name.
- Opt for auto-debit facilities
Credit card users can link their savings account with the card by opting for an auto-debit feature. Doing so ensures that credit card bills are paid automatically within the due date, saving cardholders from the hassle of remembering the exact date.
Regular card users may otherwise fail to remember the due date, leading to unforeseen interest charges on their accounts.
Keeping these pointers in mind should help cardholders manage their dues effectively when shopping for groceries and essentials. It should also allow them to avail of increased credit limits on their credit cards.
