Learn Effective Usage of Credit Cards
Credit card schemes will have an impact
Are you holding many credit cards? Then the first this is to consolidate it. Transfer the balances of costlier credit cards to cheaper one. Find out the schemes on offer by the credit card companies for Balance Transfer.
There are transfer schemes like :
Converting your credit card balances to EMI’s. In this your dues will get converted to a loan at smaller interest rate and you could repay it at EMI. Here you cannot prepay your dues. It has to be on EMI.
Lower interest rate
Another way is to transfer your balance at a lower interest rate. A new credit card will allow you to repay your old debt at lower interest rates. There will be a limited time frame for doing this. Also any new purchases cannot avail the grace period.
Bank A can offer you a balance transfer where you could transfer your balances from another card to a discounted rate interest than your old card. Here you will gain from paying heavy interests to the other Bank’s credit card. Even Bank A can offer you to make the balance amount to a EMI which will be more affordable for you to pay back. Some banks even offer upto 3 months waiver of interest on transferred balances.
Catches on a Balance Transfer
When ever you transfer balances, you have to be prepared to pay the annual fees and a stipulated transfer fees. You may also lose any reward points on the transferred balance. Always remember that the attractive lower interest will be only for few months, after that period you have to pay the regular interest rates. Always check for this and transfer balance only if you can benefit after considering these costs.
Using Low Cost loans
Credit card outstanding always have a heavy interest attached to it. You can always look for cheaper alternatives like personal loans for which the interest rates are a only a fraction of credit card loans to pay back your balances. It can help you to cut cost on interests. Even certain employers provide interest free loans, that could be another alternative to clear your dues.
Carrying Balance to next month could lose grace period
Most of us do not read the terms and conditions of credit cards in details. Certain cards will give you interest free credit upto 50 days, but it will not be applicable if the previous month balance was not settled. This will give you a heavy interest on all other purchases made on this month starting from the date of purchase.
Avoid cash advances
It’s a Mantra for Credit card usages €œAvoid cash advances€. Cash advances from credit card are very expensive. Avoid making cash withdrawals from your credit card. It will cost you a transaction fees of upto 3% and an interest rate of upto 3% per month on the balances. (Interest rates may vary on each bank).
Recommended Read :
- Methods to find The Best Credit Card
- What is a Credit Card?
- Who are Credit Card is suers?
- Who is a Credit Card Merchant?
- Secrets Behind Credit Card Numbers
- How does a Credit Card work?
- How to Compare & Find the best Credit Card?
- Use Credit Cards wisely – Avoid Heavy Debts
- Alert!! – Reswiping Credit Cards by Merchants
- Beware of Credit Card Thefts
- 10 Safety Tips – Credit Cards
- What are Credit Cards and Loans?
- Importance of Prompt Credit Card Payments