Financing foreign trips or buying high-end gadgets can be easy when you know how to use your credit card wisely. Credit cards give you the freedom to take risks, which you otherwise certainly cannot afford.
It is however wise to have your repayment plans ready while planning to finance your dreams. Most people often go for low cost loans or crowdfunding for certain endeavours, however funding your dream with a credit card proves to be a good option.
Let’s see how one can use credit cards in the best possible way
- Understand your risk factor
While using credit cards, ensure to spend money on something worth the expenditure. If your venture is not fruitful enough or does not have much potential, then it is not advisable to swipe your credit card against it.
With every purchase come reward points. Keeping track of the same will allow you to accumulate and redeem those points whenever required. Thus, a wary accounting proves helpful for your future dreams.
- Pay your credit amount within the billing cycle
There are a lot of reasons for you to pay the credit card bill on time. If you are late, it can harm your credit score adversely. With a low score, it will be difficult for you to get a loan in future. Moreover, as the debt rises, so does the interest.
[Note: You can also convert your purchases into easy EMIs. For example, the Bajaj Finserv RBL Bank SuperCard allows conversion of purchases into easy EMIs against a nominal processing fee.]
A few other pertinent rules which might help you stay on track
- Try to pay the monthly minimum amount on time at least. If you do not, then be prepared to get hit by massive interest rates on moderate amounts.
- You can set up an auto-debit mandate from your personal accounts. This will ensure timely payments of your credit card dues even if you forget to do so.
- Utilise credit cards in a way that you can earn maximum reward points and cashbacks from them. Also, remember to redeem those rewards in time.
- Lastly, prefer not to go over your credit limit. This will further raise the interest charges and may also impact your CIBIL score.
Try remembering these points the next time you apply for a credit card!
A word of caution
Ensure timely repayments of your credit card dues to maintain a high credit score. A good score will let you avail advances in the future at lower interest rates. However, failing to repay in time will lower the credit score considerably. As such, it reduces your chances of availing loans in the future.
Your dreams were not born to get crushed. NBFCs like Bajaj Finserv also offer pre-approved offers on credit cards, home loans, business loans, personals loans, and several other financial services. It makes availing a loan easy and less time-consuming. To know more about your pre-approved offer, submit some necessary details online.