Wisdom Credit Cards

Weren't you surprised when you got a pre-approved loan on your credit card at a discounted rate of interest?



Well while such gimmicks let credit card companies laugh their way to the banks, it is you who end up feeling miserable. Always remember credit card should be looked at as a financial tool, not as a means to buy now and pay later. Go through the various offers made by your credit card company carefully. Many people forget to do this and hence lose out good opportunities. Used wisely, credit cards can become one of the most powerful financial tools available. Use them poorly and credit cards can come back to haunt you.

• Remember that every time you are using the credit card, you are taking a loan.

• Never go for Cash Advances. It posses Huge Interest Rate and Low(No) Grace Period.

• Read the fine print and be wary of special offers. Read the legal stuff when you fill out the application, when you receive the card, and on any future mailings. Ask questions about it, before going for such offers.

• Don't forget to check the cost of the processing fee and the eligible rate of interest if you are going for 'EMI' or a flexi-pay scheme. It could be considerable.

• Avoid Debt Trap with the credit card company. Take withdrawals from Provident Fund or break that FD with your bank if possible and pay your bill on time.

• Avoid department store or gas cards. These cards carry extremely high interest rates and can be detrimental to your credit score.

• You could even tell your bank to pay the card bills through electronic clearing system (ECS), a mechanism whereby you instruct your bank to debit a fixed sum from your savings account on a particular date. The bank does it for you, provided you have enough money in your account. This will ensure the first payment is made to the card company before the due date and it helps to maintain good track of your record.

• Review your statement every month. Due dates, fees, and interest rates are subject to change. Reconcile transactions and keep an eye out for fraud.

• If your Cash Back amount are not credited or reflected in your account, immediately call the helpdesk and give details if necessary.

• Never disclose the card number to anyone unnecessarily.When using your card in a merchant establishment, only your signature is needed. Never disclose any other personal details about yourself, be it your address or phone number.

• Avoid carrying to many cards. The maximum amount of credit cards you can carry are only three, try not to carry more than that because too much available. credit can and will hurt your credit score just as bad as having bad credit.

How to use your Credit Card wisely