credit cards were designed for convenience but can be misused very easily. however, if used well, a credit card often does more good than harm. credit cards help you build a credit history that allows you to qualify for loans at favourable rates and cheaper insurance. you also get exclusive privileges depending on your card and a bonanza on redeeming your reward points.
if you’re getting a credit card or are wondering whether you should sever ties with your current one, here are some points that will help you decide.
choose the right card
credit cards are never vanilla. every card is created with a particular purpose in mind. if you choose the right card, you can be greatly rewarded. on the contrary, picking the wrong card can lead to you losing out on benefits that don't suit you.
the temptation to overspend is common among credit card users. as a consequence of overspending, your credit score would plummet leading to high-interest rates on loans and insurances. you will also accumulate higher debt as a result of the interest applied to your outstanding credit.
build a high credit score
a credit score is a metric for a bank to discern whether you have the propensity to repay your borrowed funds on time. in other words, the higher your credit score, the better your chances of getting approvals for loans, higher credit limits, cheaper insurance. a CIBIL score of 750 and above is considered good.
know what to do to prevent fraud
nothing hurts more than seeing your hard-earned money get stolen due to negligence. you must always be on guard to keep yourself from scammers who may try to trick you into giving your card details.
credit cards, though initially might seem scary, can prove to be the window to great experiences. if you are careful and have figured out the sweet spot to balance all the factors in, these cards will prove to be more than just useful in the long run.
recently applied for a credit card? a quick tip from us to check out CRED before you make your credit card bill payments. CRED is an app that offers premium deals and rewards when you make your credit card payment on time. download CRED app now on your iOS or Android device!