Now that you have a credit card, you no longer need to worry about running short of cash when shopping. Plastic money is easy to carry and your favourite pair of jeans or that stylish watch that just caught your eye is only a swipe away. To enjoy the most benefits, you need to choose the card carefully. For instance, by choosing lifetime free credit cards, you have no annual fee to worry about.
You may be excited to apply for a new credit card, but here are five things to know before going ahead.
- Repayment options
To avoid incurring interest on credit card dues, find out the due date of repayment and plan your finances accordingly. Plan your expenses such that you have enough funds to repay the dues on your credit card without any delay. While issuers offer a grace period, between the end of the billing cycle to the due date of repayment, it is not a good idea to wait till the last moment to transfer the funds. Set a date on your calendar to remind you to make the transfer a couple of days in advance. This way you can avoid any late fees or interest charges. But what if that’s not possible at times? Here are two things that can help:
- If you had got a credit card with the lowest interest rates, you have less to worry about.
- Convert the outstanding amount into EMIs. That way, you don’t pay any credit card interest. There may be a processing fee for this facility.
- Rewards and offers
Be aware of reward points. If the card offers more reward points for online purchases, you can shift to buying most of your groceries and essentials online. When you apply for a new credit card, be sure to check if there is any expiry date for reward points. Choose an issuer that offers unlimited reward points, which means there is no expiry date. Also, keep an eye on the various offers. There may be discounts and cashbacks on several purchases, including flight and hotel booking, as well as certain facilities like free access to airport lounges.
- Spend within the credit limit
To avoid over-the-limit fees, keep your credit card expenses below the credit limit. In case your monthly expenses are higher, you can always pay for some things in cash. Else, apply for a new credit card with a higher limit. If you do so, choose lifetime free credit cards, so there are no annual charges to worry about.
- Credit card security
If your cash gets stolen, it’s hard to trace it and even harder to get it back. If your card gets stolen, you can simply call the issuer and have the card blocked immediately to prevent any fraudulent transactions. Even if there is an unauthorised transaction after your card is stolen, the issuer bears this risk. To keep your card from being misused, never share its details, like the PIN or CVV number, or transaction verification codes like OTP with anyone.
- Build your credit score
Use the credit card frequently and repay the dues in time to build your credit score. As long as you have the ability to make the repayment in time, don’t hesitate from using your credit card. A high credit score stands you in good stead when applying for a loan.
While credit cards with no annual fee help, your financial planning and discipline can maximise the benefits.