Credit card use is something we love. We have the freedom to spend our money however we want, whenever we want, without having to worry too much about how to pay for them. So, when it comes to handling a financial emergency, credit cards have established a reputation as one of the most preferred financial products. And if that weren’t enough, credit cards also provide reward programs that not only enable you to save money but also offer you to access a better standard of living.
Since cashback credit cards have low annual fees, they are among the most popular credit cards in the Indian market. However, they come with some great cashback advantages.
Important things to remember
Before using your cashback credit card to make purchases, you should be aware of a few things whether you already have one or are considering getting one. You must keep a lot of things in mind, as further discussed in this article, from spending on a credit card to receiving the benefits through it.
How cashback credit cards function
Every time you use the Card, the amount you spent is added to your Account as a cashback offer. For instance, if the Card guarantees you 1% cashback, you will receive Rs. 10 for every Rs. 1000 spent.
Before applying, think about your spending patterns
If you have a habit of avoiding using credit cards in favor of debit cards or cash, Cashback credit cards might not be a good fit for you or provide any extra benefits. Overall, keep in mind to avoid the temptation to go over your credit card limit to get a cashback and end up in debt.
Managing spending alerts
Setting spending alerts allows you to react instantly to your spending habits. You can set a threshold on your credit limits or the transaction value, to make sure you don’t go over your planned spending limits. You can enable security alerts for your credit card, which are available on the majority of cards. These alerts identify and draw attention to potentially fraudulent spending patterns.
Avoid using your credit card to make an ATM withdrawal
Yes, credit cards allow you to use an ATM to get cash. But should you do that? No, not at all. Why? because using a credit card to withdraw money from an ATM immediately results in high fees (without a time limit), and for which you do not want to pay. Thus, avoid cash advances and withdrawals and avoid using your credit card as your primary method of payment.
Pay attention to the joining and renewal fees
There are typically joining and renewal fees for credit cards. Pay close attention to the fee schedule and only select a card whose fees are reasonable when compared to the rewards it offers. Some credit cards start waiving fees if you exceed a predetermined annual spending limit. You can avoid paying annual fees by using this reversal benefit.
Also Read: Should You Cancel Unused Credit Cards?
Conclusion
Credit cards can be one of the best financial tools if used responsibly and wisely. But not everyone can utilize their credit card to its full potential. It is because they didn’t select the best credit card or because they lack the maturity to use a credit card properly.
The advantages, perks, and rewards of using a credit card are incredible, but only if you have the self-control and willpower to gain profits from them. If you accurately assess your spending patterns before applying for a credit card, cashback credit cards can significantly increase your savings. Thus, the above credit card usage advice will assist you in managing your money more effectively while spending on credit cards.
