It could have been quite long since you would have handled a few notes of currency, thanks to the advent of the Plastic Money. Due to the credit card revolution, there is no need for us to carry cash anywhere we go! We are never short of money to buy something which we really want; we never get into the trouble of not having enough cash for the rest of a holiday tour we are enjoying due to overspending, and we even get rewards and prizes from the credit card company because we spend through their credit card!! Hats off to credit cards. Almost all transactions that we do day to day are through credit cards. They have made things simple and convenient.
However, a credit card not wisely used is like a nuclear bomb in the wrong hands. The following points give you suggestions that can help you get the most out of your credit cards.
- Do a study of the features and benefits of various credit cards available and zero in on the best of each category.
- Apply for one in each category. Many banks are offering Lifetime Free Cards without any annual charges. Avail these facilities unless there are value added attractions in cards in which charges are applicable.
- Review the features and benefits of each card at every six months, and replace the less attractive ones with better options. Never keep any sentimental attachment with a particular card.
- Do not have too many cards. My opinion is to have a maximum of five cards, and each should be the best in its own category.
- Get the payment due date structured in regular intervals like First Card on 4th of the month; Second Card on 12th of the month, Third One on 20th of the month; and Fourth One on 28th of the month. This will ensure you to plan best possible credit period for each of your purchases.
- Many cards offer balance transfer facility, and at times there is a free interest period. If carefully used, you can further augment your credit period.
- Many banks offer cash back on purchases for a promotional period. Avail this facility and do maximum purchase during this.
- Do not use credit cards at places that charge an extra fee for credit cards. Transact in cash with them.
- Never default on a credit card payment; the penalties are very high. Withdrawal of cash using credit cards should also be avoided as the interest rates are normally much higher. Make a resolve to pay the dues in full by the due date.
- Most of the banks have a running "Rewards Points Program". Some allow these points to be used as cash for payment of dues. Some allow reward points to be converted to free Air Miles. These points can also be used to buy merchandise as per their catalogues. Study these schemes in depth to derive the best possible benefits.
- There are banks who offer huge surprise discounts if you are lucky. These are based on a computer generated random selection of credit card bills.