Credit Cards give you purchasing power as you can spend without worrying about an empty wallet, but this is not the only advantage of having a credit card. Other than providing you with a credit limit, a credit card also allows you to save amazingly, provided that you use your card responsibly & wisely. Many individuals believe that using credit cards is directly proportional to unmanageable debt, but this can be considered one of the biggest credit card myths. Using Credit Cards will lead you to debt only if you are not responsible enough. But, if you know how to use a card wisely, you can save a lot and get extraordinary benefits as well. If you are a credit cardholder or planning to get a credit card soon, read this article to understand how you can boost your savings with credit card:
Choose The Right Credit Card
Choosing the right credit card is the first and sometimes the most challenging step to start your credit card journey. Most people make the mistake of choosing a credit card without good research and without understanding their own requirements. Before applying for a credit card, you must be aware of the fact that a credit card will benefit you the most when it suits your spending behavior. So, in order to choose the right credit card, you first need to understand your needs and spending habits. After that, look for the credit cards that offer an accelerated reward/cashback rate on the categories where you spend the most.
If you spend a lot on a particular brand, you can look for a co-branded credit card that rewards you the most on spending over that particular brand. For example, people who frequently shop online at Flipkart should go with the Flipkart Axis Bank Credit Card, and those who prefer Amazon should choose the Amazon Pay ICICI Credit Card. Moreover, if you love traveling, you should consider the credit cards that offer some best travel benefits like complimentary lounge access, accelerated rewards/cashback on travel-related spends, discounts on flights/hotels, etc.
Make Everyday Purchases Using Your Credit Card
Making everyday purchases using a credit card is often considered a bad habit by lots of people, but it is actually beneficial as you save more when you spend more with a credit card. You should try making all your purchases using credit cards so that you can save in the form of reward points/cashback, but you don’t get any such rewards when you pay using cash. Moreover, if you have a credit card offering milestone benefits, you can try to achieve the required spend milestone by making all your purchases with a credit card.
You can earn thousands of bonus reward points/gift vouchers, or several other types of benefits by achieving the spend milestone on your credit card. Also, making more and more purchases with your credit card will help you achieve the minimum annual spend required to get the annual fee waived off. However, overspending is never a good idea, but what you need to do is use your credit card for most of your purchases and make sure that you use your card responsibly.
Also Read: How Does An Inactive Credit Card Affect Your Credit Score?
Be Updated With Limited Period Offers
Credit Card issuers keep launching exclusive limited-time offers on credit cards. These offers can be of different types, but all are aimed at providing the customers with maximum benefit. If you have a credit card, you should make sure that you are not missing out on any such offers. For example, if your card issuer has launched an offer valid for one month under which you can earn Rs. 2,000 voucher on spending Rs. 10,000 or more, you should try to achieve this spend milestone by making most of your purchases with your credit card. Such offers allow you to earn great benefits within a short time period.
Make Payments On Time & In Full
Paying your credit card bill is the most important thing that you must keep in mind if you are having a credit card. It is because you can maximize your credit card rewards only by avoiding all the extra charges, including the late payment fee, interest charges, etc. So, you should make sure that you only spend the amount that you can afford to pay by the payment due date. If you miss your credit card payment, you don’t only invite the late payment charges, but high-interest rates also start accruing on your card’s outstanding balance, which further leads to unmanageable debt.
Other than making payments on time, it is also equally important to pay your credit card bill in full every month. By making only the minimum payment, you can avoid the late payment fee, but the interest will still be applicable. So, if you want to save more with your credit card without paying any extra charges, you need to pay the full outstanding balance every month.
Also Learn: Credit Card Bill Payment Methods
If you use your credit card wisely, you will be amazed to see how it helped you save a lot on all your spends. Being responsible enough to pay your bills is the only thing that you need to keep in mind and if you can do that, you will surely make the most out of your credit card. However, there are a few either things as well that you need to be aware of in order to save more with your credit card, like choosing the right card according to your needs and using it for everyday spends. We have come up with this article with a few tips to uplift your saving with a credit card and we hope that it will help you understand how to use your card for the maximum benefit. If you still have any doubts or questions in your mind, you can freely ask us in the comment section below!