How To
Use A Credit Card
These days, it is common for almost everyone to have one or
more credit cards in their possession.
But not everyone understand how to use a credit card. Some
credit card holders only know how to spend on their credit
cards till the credit limit is reached. Others know only about
using credit cards for shopping and bill payments.
Still others are too afraid of using their credit cards. Yet
there also those who are unaware about the ways to protect
their credit cards.
So what is it that you should know about
using credit cards?
The first thing to remember is the fact that whenever you
use your credit card to make a payment, you are borrowing that
amount from credit card supplier. As a result, you'll need to
return this borrowed money to the credit card supplier within a
specified period of time failing which you will incur a late
fees and interest on the amount borrowed.
So, you should be careful about your credit card payments.
Besides the interest and late fee, your credit rating is also
affected and we know how important the credit rating
is.
A bad credit rating can lead to rejection of loans
applications, mortgage, subsequent credit cards application and
even your application for a job.
You should also make it a point never to exceed 70-80% of
the credit limit on your credit card. Not only does this shield
you from getting into a credit card debt trap but also protects
your credit rating.
Credit Card Fraud Protection
Every credit card user should be aware of credit card fraud
protection. The good thing is that there is generally a set of
very simple precautions that the credit card holder can follow
in order to protect themselves from credit card fraud.
All credit card companies supply instructions to this effect
at the time of credit card delivery. These include things like
reporting theft, signing at the back of credit card,
PIN/Password protection etc.
For maximum protection, besides the security related
instructions, it’s also important to read through the
instructions related to the benefits on your credit card in
order to realize the full potential of your credit card.
These include discounts on travel, shopping, car rentals
etc. Then there are cash back options as well which have become
very popular lately. For travelers, there are some
really good benefits too. These include things like
free travel insurance and baggage protection.
Generally, besides the regular benefits, the credit card
suppliers also include some joining benefits too for the new
customers in the form of discount vouchers.
Fees, Penalties, Commission, Other
Charges
Another important thing you need to take note is the
various kinds of fees, penalties, and
commissions charged by your credit card supplier.
Besides the annual fees and APR there are other services too
which attract a fee or commission e.g. there is a fee
associated with cash withdrawals; similarly there is a
commission associated with foreign exchange transactions.
All these charges are clearly mentioned in the instructions
booklet that you receive with your credit card and any changes
to these are separately communicated by the credit card
company.
Credit card suppliers keep coming up with a lot of different
offers throughout the year. Be on the lookout for these offers.
Some of them might be of interest to you.
Generally, you will receive intimation about these offers at
your billing address or even your email address too.
Almost all credit card companies have a membership rewards
program too wherein you can earn credit points for any payments
made using your credit card.
Once you have accumulated enough points, you can exchange
them for free gifts. Very often the catalogue of these gifts is
also supplied at the time of you joining the membership
reward programs.
It is important to note that there might sometimes be an
annual fee associated with the membership rewards program.
So just learn more about your credit card and make full use
of its capability.
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