Credit Card Tricks and Tips: How to Use Your Card Smartly and Protect Your Credit Score
Using a credit card wisely is crucial for your financial health and CIBIL score. While credit cards provide convenience, certain habits can negatively impact your credit profile. Here’s a guide on how to use your credit card smartly and avoid mistakes that could cost you.
💳 Avoid Cash Withdrawals
Withdrawing cash from your credit card ATM is expensive, as interest starts accruing immediately, along with cash withdrawal fees. Use this option only in emergencies and repay the withdrawn amount as soon as possible.
💰 Don’t Spend Beyond Your Means
Overspending can lead to debt accumulation. Create a monthly budget and stick to it to ensure that you can pay your credit card bill on time.
📝 Avoid Paying Only the Minimum
Paying just the minimum amount may seem convenient, but it accumulates heavy interest over time. Always aim to pay your full bill to avoid unnecessary fees and interest charges.
🎁 Use Rewards Wisely
Make full use of your card’s benefits such as cashback and reward points. Choose a card that aligns with your spending habits to maximize returns.
📊 Keep Credit Utilization Below 30%
Using more than 30% of your credit limit can negatively affect your CIBIL score. Try to maintain your utilization below this threshold for a healthier credit profile.
❌ Avoid Multiple Applications in a Short Time
Applying for several credit cards within a short period can harm your credit score. Apply only when necessary and maintain at least six months between applications.
⏰ Pay Bills on Time
Timely payments prevent late fees and interest charges. Set up payment reminders or enable automatic payments to ensure bills are always paid on time.
🔒 Maintain Online Security
Never share your card details with anyone. Avoid using public Wi-Fi for transactions and enable two-factor authentication to enhance security.
By following these tips, you can use your credit card smartly, improve your CIBIL score, and secure your financial future.
