Here we will discuss that How to use your Credit Card smartly for beginners. If you learn these techniques then you will get rewards as well as your credit score will grow rapidly.
This credit score will help you to take any further loans like home loans, personal loans.
The best thing about a credit card is- you can use the interest-free money of that particular bank for a certain period. You don’t need to pay any interest on that amount.
We will also discuss that should we use a credit card or not. And if we use then how many credit cards should we use ?.
As well as when to use a credit card and when not. The topics we will cover here are-
Now let’s discuss all the points one by one.
What is a credit card.? ( How to use your Credit Card smartly for beginners )–
Let’s assume that you are earning a certain amount of money which is a good amount of money. In that case, the bank can give you a credit card. It means the bank is confident enough that you can use it.
As well as if you are doing any business and if you are eligible then also you can get a credit card.
By the name CREDIT, you can understand that it is something like- use first and pay later type scheme. You can buy anything you want, by using the Credit card you have taken from the bank.
Does not matter that you don’t have money in your account. The credit amount you need to pay back within a certain time.
But there is a monthly credit limit that will be set by the bank.
Most credit cards have a return window of 45 to 50 days.
Like if you spent some money on 1st January then you need to pay that amount back within 15 Feb or 20th Feb depending on the credit card company.
Difference between a Credit Card and a Debit card ( How to use your Credit Card smartly for beginner )—
By debit card, you can only use the amount that you have in your account. But by credit card, you can spend up to your credit limit does not matter there is money in your account or not.
As well as if you are using a credit card and you are paying your credit amount from time to time then it will improve your credit score.
But debit cards can’t impact your credit score.
If you have a bank account then you will get a debit card against that account. But to take credit cards you need to fulfill some criteria.
The criteria are set by the banks. It is based on your earnings.
These are some major differences between a debit card and a credit card.
Advantages of using a credit card ( How to use your Credit Card smartly for beginner )–
This is something you should know if you want to know How to use your Credit Card smartly for beginners.
If any kind of emergency came then you can use the credit card for that emergency purpose.
Like if any kind of health emergency came then and you don’t have money in your bank account as well as you don’t have any Mediclaim policy then the credit card will help you a lot.
Because emergency will not take your permission to come.
You will get interest-free money for a maximum of 45 to 50 days. But these are (interest-free days ) depending on your billing cycle.
As we discussed before it will improve your CIBIL score if you pay the credit amount from time to time.
There are many types of credit cards available in the market. Many cards will give reward points or cashback also.
There are some apps available in the market also which helps to increase your cashback or reward points.
These are some major benefits.
Disadvantages of using a credit card ( How to use your Credit Card smartly for beginner ) —
You know that banks will give you a maximum of 45 to 50 days to pay back. But if you failed then the bank will charge you almost 2.5 to 3 percent interest per month.
This is the highest interest rate of any loan.
And let’s assume you spent some amount on 1st January and you need to pay back within 20 Feb but you failed and give payment on 21st Feb.
Then you need to give the interest of that total of 51 days.
You can withdraw cash using your credit card. But never ever withdraw cash through your credit card. It can bankrupt you.
As well as if you failed to pay in time that will affect badly on your CIBIL score.
Should you use a Credit card or not ( How to use your Credit Card smartly for beginner )—
Most of us face many problems just because we can’t control ourselves to use it. Always remember that – spent that much which you can pay back timely.
Otherwise, it will affect you badly and you may return the credit card to the bank very soon.
If you can use it properly then this can be the best loan for you. Because you can get a maximum of 45 to 50 days interest-free period here.
But all the other loans will charge you for that. If you can use it just only for emergency purposes then that will be the best thing for you.
Smart ways to use a credit card ( How to use your Credit Card smartly for beginner )–
If you want to know How to use your Credit Card smartly for beginners then these are some important things which you need to follow.
1.Always go with Auto Debit.
Like if you spent 5000 rupees on 1st January and the payback date is on 20Feb then you need to set an auto-debit process on that date in the bank you want to pay from.
Otherwise, if you forgot to pay then you have to give a big amount penalty. You can any trusted app to do that.
2.You need to remember the billing date of your credit card. For example, your billing date is the 10th of every month.
Now let’s assume you forgot your billing date and spent some amount on the 9th of the month.
Just because your billing date is on the 10th that is why the bill will generate on the 10th. That means one day after you spend that amount.
After that, you have to pay within 20 days after the billing date. So in this case, you are getting the time of only 20 days.
But if you spent it on the 11th or 12th then you will get a maximum of 45-50 days to pay back.
How to choose the best credit card (How to use your Credit Card smartly for beginner )—
You need to check some important things like–
If you failed to pay timely then what will be the interest rate you need to pay. Always search for a low-interest rate.
Always check that what is the annual maintenance charge for that card. The charge should be zero or very low.
The issuance charge also has to be very low.
It should suit your expenditure pattern. Like there are many cards which are giving cashback on flight booking, hotel booking, offline payment E.T.C.
First, identify where you spend the most and according to that select your card.
As well as which cards are giving more rewards and offers, you should also check.
1.How can I use my credit card as an advantage?
There are many ways to take advantage. Like never pay your bill late. Use the reward points to do buy something.
Don’t use all the limits of your credit card.
2.What is the only way to use credit cards correctly?
The most important thing is to use that much that you can repay. And repay timely. Otherwise, the bank will charge a heavy penalty.
As well as find which bank is giving is charging the lowest interest rate.
3.What is the fastest way to build credit?
Using Credit Card can be an option to build credit fast. But you have to use it very smartly and you have to pay on time.
4.What should you not buy with a credit card?
There is as such nothing that you can’t buy with a Credit Card. But do not withdraw cash from it ever.
It can destroy you.
Anything you can buy with a Credit Card but you should control yourself. Buy according to your need.
5.How to use a Credit Card for the first time.?
As we discussed before just remember one thing that charge that much amount which you can repay within the time.
Also, remember that always use max to max 30 to 33 percent of your credit limit. Not more than that.
6.How to use a Credit Card for beginners?
We already discussed this. So read the article carefully. Just remember if you can learn that how to use it in a smart way then it can help you a lot.
7.What is the safest method of payment?
All the methods are safe. But you can do an auto-debit set up in the bank you want to pay from.
Read the article to know more.
8.What you should be aware of when getting a credit card?
You have to check at least 2-3 most important things before you take a Credit Card. Like- the annual fee, loyalty points, or reward, cashback E.T.C.
Read the article to know more.
If you have any other questions on this topic then please comment below.