As the new year is coming, you might be ready with a list of resolutions to take on the first day of 2023. Many people take new year’s resolutions to manage their finances better, but they don’t work on how they can achieve their goals. If you are having a credit card, you might also be planning some resolutions like clearing off the debt, not spending too much on credit cards, and so on. But, something more important than this is to understand the procedure and necessary steps to be taken for the same. Let us help you plan better for the new year. In this article, with every single essential information, we will help you understand how you can maximize your credit card benefits in the year 2023. Go through the complete article and make 2023 a great year for you in terms of finances:
How Can You Maximize Credit Card Benefits in 2023
You might have made a lot of credit card mistakes in the previous year, but learning from mistakes is the best form of learning. The following tips will help you understand some do’s and don’ts while using credit cards so that you don’t make the same mistakes in the upcoming year:
Make a Wise Decision While Getting a New Card
People often get tempted by pre-qualified credit card offers and tend to apply for any random credit card without checking whether it suits their requirements or not. But, that is not at all a good idea. One must do thorough research before applying for a credit card in order to understand which card can fulfill most of their expectations. Credit Cards are definitely very advantageous and help you save a lot, provided that you have chosen your card wisely. If you have already got a credit card without understanding your spending behavior, you might be regretting it now. And if you are planning to get your first or another credit card in the year 2023, you should follow the below-mentioned steps before you make a final decision:
- Make a list of all features that you are looking for in a credit card and understand your spending behavior. You should analyze what are the categories where you generally spend the most. Some people spend most on shopping and others may be spending somewhere else. Keeping this in mind, card issuers also offer credit cards that are best suited to different categories, such as rewards, travel, online shopping, and more.
- Once you decide what type of credit card you want, visit the official websites of different card issuers and filter out the cards that seem to fulfill your requirements. Don’t just go with the first option that seems fine to you, but make a list of some credit cards that provide great benefits in the categories where you spend the most.
- Compare all the credit cards that you have filtered out. Make sure that you don’t compare these cards on the basis of only one or two factors, but keep all the necessary factors in mind. You should look for their reward rates, annual fees, and additional benefits as well.
- After comparing all the cards, choose the one that seems to be a good fit for all your requirements and suits your spending behavior as well. There might still be multiple options and what you can do is go with a card that provides the maximum benefits with minimal charges.
Know How You Can Maximize Your Credit Card Rewards
Many people have great rewards credit cards, but they are not aware of how to maximize the benefits of using credit card rewards. Reward Credit Cards give you the maximum benefit when you have chosen your card on the basis of your spending behavior. Different reward credit cards come with different reward rates. Moreover, these cards provide accelerates rewards across selected categories and these categories vary from card to card. Some credit cards offer accelerated rewards on shopping, some on travel, and others on dining and entertainment. So, in order to maximize your rewards, the first wise step you must take is to choose a card that offers accelerated reward points/cashback in the category where you generally spend the most. If you also have a credit card that offers a decent reward rate, you can maximize your credit card rewards this year using the following tips:
- Try to make most of your retail purchases using your credit card, especially when you purchase something that can earn you a good number of rewards. Many people believe that making everyday spending using a credit card is not a good idea, but that is not true. You can earn reward points on making your daily use purchases using a credit card, whereas you don’t earn any such points when you pay using cash. However, you should also make sure that you don’t overspend in order to earn more and more rewards.
- Be updated with the short terms and long-running offers, especially if your credit card issuer has s separate portal for credit card deals. For example, HDFC Bank has the SmartBuy portal and the cardholder can earn accelerated reward points when they spend through this portal. You might not earn any bonus reward on online shopping/travel or other categories of spending directly on their websites, but when you get redirected from HDFC Smartbuy, you get accelerated rewards. The Axis Bank’s grab deals portal, American Express Membership Rewards portal, and Yes bank’s YES Cart portal also work similarly. So, just make sure that you don’t miss out on any such offers as these offers/deals help you earn a lot of reward points on your credit card spends.
- Redeem your rewards wisely and timely. You must be aware of the fact that most credit card rewards expire after a certain period. This period can be different with different card issuers and you should be knowing the same for your credit card. Make sure that you redeem your reward points before they expire. Moreover, there are generally multiple redemption options available to you. You must look for each option carefully and don’t waste your credit card rewards on a random thing that is not of much use. Look for the monetary value of reward points against different options and go with something that offers the maximum redemption value.
Never Miss Credit Card Payments
This might not be a new tip for you as almost every credit card user is aware of the fact that timely bill payments are very important. But even after knowing the importance if timely payments, many people miss credit card payments again and again. As a result, they fall into a debt trap and it becomes very difficult to come out of this because the debt keeps increasing due to the interest and other applicable charges. So, if you want to keep your credit journey smooth, the most important new year resolution you must take is to pay your credit card bills always on time. Not only this but also try to make the full bill payments to avoid any additional charges. The following are some tips related to credit card payments that you must follow in the year 2023 if you were not already following them:
- Don’t pay only the minimum due amount, but try to make the full bill payments. Paying the minimum amount helps you avoid late payment charges, but the interest is still applicable to the rest of the amount that is not paid by the due date. So, the concept of minimum due payment should only be considered in emergency situations.
- Set reminders for bill payments. If you have multiple credit cards, this is something you must do. It may be difficult to always remember the payment due date, especially when you have more than one or two cards to manage. So, the best thing you can do is set reminders for all your bill payments and try to pay the bills a few days before the due date.
- Try Credit Card payment apps/platforms for great deals and rewards. Credit Cards generally don’t offer any rewards/cashback on bill payments. So, you can consider payment platforms like Cred, Paytm, PhonePe, MobiKwik, etc, that may offer you rewards/cashback when you pay your credit card bills.
Don’t Spend Unnecessarily
As mentioned earlier, overspending is never a good idea. It is true that you have more purchasing power when you use credit cards, but never forget that only you will have to repay your bills afterward. Whenever you go out shopping using a credit card, go with a fixed budget in your mind, and don’t go beyond that. Sometimes credit card users spend more when they see spend-based offers launched by credit cards. But, you should make sure that you are not spending a huge amount on your credit card just to earn a reward/gift worth a few hundred/thousands of rupees. These offers are definitely very good for people who genuinely need to make some large purchases, but no one should spend unnecessarily just to be the top spender. This might cost you a lot when it comes to bill payments.
You can make credit cards your best friend if you are responsible enough to use them and take every step wisely. Apart from keeping all the factors affecting credit scores in mind, you must also be aware of how you can get the most out of your credit cards. Some people only pay attention to building their credit history, which is a good thing, but credit cards are not only supposed to be used to build credit scores. You can save a lot using credit cards and get exciting benefits. Just be aware and keep all the above-mentioned points in mind. These will definitely help you maximize the benefits of your credit cards in the year 2023 that you might not have done in the previous year.
Lastly, all of us at Team Cardinsider wish you a very Happy New Year!