5 Tips On How To Use Credit Card Wisely

08 May 2023

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In today’s world, credit cards have become increasingly popular and convenient. Credit cards can be a great tool for budgeting and building credit, however, it’s important to use them wisely. This article will offer tips for how to best use your credit card so that you can enjoy the financial freedom they bring with true happiness in your heart. We will look at key topics such as setting spending limits, avoiding cash advances, and more, along with sharing some famous quotes. By the end of this article, not only you should feel confident in your ability to use your credit card in a responsible manner, you will learn some famous quotes that we swear by at all times.

Tips on How to Use Credit Card Smartly

Here are a few tips to help you get the most out of your credit card:

1. Make A Repayment Strategy

“If you don’t know where you are going, you’ll end up someplace else.” – Yogi Berra

This quote from the famous American baseball player sums up a great tip for using your credit card wisely. So, the first step in using a credit card wisely is to develop a plan for repayment. This may seem obvious, yet many people fail to do this and end up paying high-interest rate on their outstanding balances. You need to set a budget and make sure that you can afford the monthly payments. As if you happen to miss your monthly bill payment, along with high-interest you are bound to get charged with late fee which collectively hamper your credit score in long run.

So here what you should follow - Develop a usage plan, stick to it. Set a repayment plan, pay your credit card bill on time, if you hold a Bank of Baroda credit card, you can pay your bill via various payment modes – Auto-debit, Net Banking , Bill Desk, etc.

2. Swipe Your Credit Card Only At Trusted Merchants

“Trust, but verify” – Ronald Reagan

When it comes to using credit cards, this quote conveys best that you should never trust blindly, verify every merchant with whom you would be transacting using your card, whether or not they are known or unknown to you. This can help to prevent fraud and ensure that you are getting the best possible deal on your purchase.

By following these tips, you can help to keep yourself safe when using your credit card online or offline.

  • Never expose your card details like CVV, Expiry No. etc. to merchant when shopping.
  • When shopping online, always check if the URL is authentic – when there is an “s” after the “http” in the web address, and a lock icon as well, you can usually tell it’s a secure website.
  • Review your statements carefully and report immediately in case you find a suspicious account activity.

3. Track Your Monthly Credit Card Spending

"Live a life that is well balanced; don't do things in excess."- Daniel Smith

This quote from New Yorks Times bestselling author aptly tells to never go overboard with unnecessary spends on your credit card that you can’t repay later and end up with high-interest rate charge. Tracking your credit card spending every month is an important step in understanding where your money is going and how much you are spending overall. If you carry a balance from one month to the next, interest will be charged on those outstanding balances, starting from the date of purchase. The amount of interest you’re charged will depend on your annual percentage rate (APR).

Ideally, the balance on your credit card should be less than 50% of your credit limit. Avoid carrying high balances on your credit cards, keep your credit card utilization in check and pay your bills on time.

Also Read - What Is a Credit Card Limit and How to Increase It?

4. Use A Rewards Credit Card

“Happiness is the reward we get for living to the highest right we know”- Richard Bach

This quote establishes the fact that when you opt for a credit card with most rewarding benefits, shopping experiences, offers, and much more, your happiness will know no bound as you not only get the financial freedom you aspire for, you earn accelerated rewards on every purchase you make. Joining benefits, welcome perks, free access to airport lounge, insurance benefit, offers on leading brands, etc., are some great features of a credit card worth using. Not just this, the rewards you earn on your credit card can be claimed for cashback, or other rewards.

Some cards offer higher reward rates for specific categories of purchases, while others offer flat-rate rewards on all purchases. There are also cards with sign-up bonuses that can give you a nice boost of points if you meet the minimum spending requirements. However, if you want to make full use of all of these features on your card, ensure that you never miss paying back your card outstanding.

5. Understand Your Credit Card Terms

“Learn continually – there’s always ‘one more thing’ to learn” – Steve Jobs

Implement this great tip when signing up for a credit card program. Knowing the important terms & conditions of your credit card agreement helps you make better use of your card. It also can help you avoid unexpected fees and keep track of your payments. Once you get through with the agreement stage, make sure you continue monitoring your monthly credit card statements as well.

By keeping an eye on your statements, you can quickly identify any unusual or unexpected charges.

  • This helps you catch any potential fraud early on and avoid any financial consequences.
  • This helps you stay on top of your finances in general. By seeing all of your charges in one place, you can get a better sense of where your money is going each month.
  • This helps you make adjustments to your budget and ensure that you're not overspending in any one area.

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    The contents of this article/infographic/picture/video are meant solely for information purposes and do not necessarily reflect the views of Bank of Baroda. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Bank of Baroda and/ or its Affiliates and its subsidiaries make no representation as to the accuracy; completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Bank of Baroda or its affiliates to any licensing or registration requirements. Bank of Baroda shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

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