5 Ways To Use Your Credit Card More Efficiently

Credit cards are one of the most contentious financial tools at our disposal. Everyone has an opinion on should you or should you not be using credit cards. 

Your father will tell you that Credit cards are the worst financial tools you can use. It has the highest interest rates, and even if you miss a single payment, you will have to pay through your nose in interest fees. 

On the other hand, your friend who frequently travels in business class using his travel miles will tell you that using credit cards is what affords him his lifestyle. But which one is correct? Are credit cards the worst thing that has happened to humanity? Or are they a great tool? It all depends on how you use it. And we have spoken to some of the experts in this field and have come up with 5 ways that you can use your credit card that will not burn a hole in your pocket. 

 

1)Use your credit card to make your basic payments

Instead of a debit card, pay with a credit card for certain expenses like Rent, Electricity, Mobile bills, grocery bills and many other recurring expenses which you were going to make anyway. The trick is to make the credit card payment at the end of the month.

 

2)The only kind of history that matters

A good credit history means that you will be able to easily avail a home or a car loan, a loan for business and so on. And credit card is the most often used and easiest way to build this credit history. However, it is a double-edged sword, if you don’t follow the rules and do not make payments on time, you are more likely to have a huge negative impact on your score which takes many years to repair. 

 

3)Liquidity when you really really need it

People have always preached to spend within your limit and not use credit cards beyond your means but sometimes you can’t, especially for payments like medical bills or any other emergency payment that needs to be made. In case, you made the payment knowingly that you can’t pay back on time, just make sure you plan it in a way that will allow you to make the payment done as soon as possible. Just don’t let it linger. 

 

4)Free plane tickets

Remember your friend who frequently flies business class while paying for the economy. It’s time for you to reap those benefits too. Choose a card that gives you maximum reward points that can be converted into airline tickets, Amazon vouchers or any other benefits that your card provider has. Once you have the airline miles, you can choose to either get free tickets (woohoo) or upgrade your economy class tickets and fly in style. 

 

5)Free money

Always make your payments on time, you will never be charged an extra penny (unless your card comes with an annual fee). So you have the option of using the credit line provided by the bank, and paying it back within the time frame, and basically, have access to free credit. Moreover, if your card ever gets stolen or you are ever targeted for a fraudulent transaction, you have no liability which is not in the case of debit cards. 

6)Bonus Point -  Credit cards' debt trap

The only time that credit cards suck is when we use them to spend beyond our means. When we buy that shiny new iPhone when we can’t really afford it right now. When we fall into the debt trap, the no-cost EMIs, that is when credit cards suck. Use Credit cards well, and they can be a great financial tool.