Credit cards have become an essential part of our financial lives, facilitating cashless transactions, and offering convenience and rewards. However, it is also easy to get carried away and lose control of our spending, leading to excessive debts and financial stress. In this article, we will discuss some simple habits to adopt to use credit cards responsibly.
- Create a Budget:
The first step to using credit cards responsibly is to create a budget. A budget will help you keep track of your spending and ensure that you don’t overspend. Allocate a specific amount for your monthly expenses, including repayments, utilities, and entertainment. Stick to your budget to ensure you don’t fall into the trap of overspending.
- Use as per Your Credit Limit:
Credit cards come with a certain credit limit assigned to them. It is important to spend within your credit limit to avoid getting into debt. Spending more than your credit limit can result in penalties and can also negatively affect your credit score.
- Pay Your Bill on Time:
Late payments can result in hefty interest charges and penalty fees. Make sure you pay your credit card bill before the due date to avoid unnecessary charges. Setting up auto-debit options or bill reminders can help you stay on top of your payments.
- Track Your Spending:
It is essential to track your spending on credit cards. Most credit card apps come with features that enable you to analyze your expenses, monitor your credit score, and receive alerts for purchases. Use these apps to track your spending and ensure that you are staying within your budget.
- Redeem Credit Card Rewards:
Credit card companies offer rewards for using their cards. Allocate time to read the rewards and offers carefully to ensure that you redeem rewards that align with your financial priorities. Redeeming rewards at the earliest will ensure you don’t miss the deadline for utilization.
How can you get your 1st Credit Card?
Getting your first credit card can be an exciting step towards building a credit history and accessing the benefits of credit card usage. However, it is essential to choose the right credit card based on your needs and financial profile. Here’s a step-by-step guide on how to get your first credit card.
- Check your Credit Score:
The first step is to check your credit score. Credit scores are critical factors that influence approval of credit card applications. A good credit score increases the likelihood of getting approved for credit cards with better rewards and benefits.
- Decide on a Card:
Decide on a credit card that meets your spending needs and financial profile. It is important to compare features like interest rates, fees, rewards, offers, and benefits before choosing the right card.
- Fill out an Application:
Fill out an application form with accurate information. Ensure your information, such as your name, address, and social security number, matches the information listed on your credit report.
- Provide Income Information:
Provide income information on your application. This includes your employment status, income, and assets as it is a crucial factor for credit card approval.
- Review and Submit:
After filling out the application form with the required information, review the application carefully, ensuring it is accurate and complete. Submit the application.
- Wait for Approval:
Wait for approval. The approval process typically takes up to two weeks. The approved credit limit will be based on the applicant’s income and credit score.
- Activate your Credit Card:
After receiving your credit card via mail, call the customer care number to activate your card. You can then begin using your credit card as per your requirements.
Getting your first credit card is a significant milestone but also an equally important decision as it plays a crucial role in establishing a credit history. By checking your credit score, comparing and choosing a suitable card, filling out an accurate application, providing income information, reviewing, and submitting the application, and waiting for approval, you can get your first credit card and enjoy the benefits of credit usage.
Credit Card Apps:
Credit card apps have made it easy to manage credit card expenses, bills, and rewards. Some of the best credit card apps in India include:
Bajaj Finserv:
Bajaj Finserv App offers a variety of financial products, and its credit card app feature has a range of benefits to offer. The app allows customers to get real-time updates, view transactions, and receive reminders on due payments. Users can also pay their credit card bills using this app.
Cred:
Cred is another popular credit card management app that provides a range of benefits. Users can track their monthly credit score, access cash-back rewards, and pay their bills using the app. The app also provides information on deals, discounts, and more.
PhonePe:
PhonePe is a popular payment app in India that allows customers to pay credit card bills and top-up their wallets with credit cards. The app provides ease of access and a user-friendly interface.
Paytm:
Paytm offers an easy way for users to pay their credit card bills using the app. With the provision of auto-payment during bill payments, Paytm ensures that users never miss a bill payment deadline.
Gpay:
Gpay, or Google Pay, is a payment app that allows users to pay their credit card bills using their UPI credentials. It is a user-friendly app and allows hassle-free payments.
In conclusion, using credit cards responsibly is critical to maintaining financial health and avoiding unnecessary debts. Adopting simple habits like creating a budget, tracking your expenses, and paying your bills on time can help you use credit cards effectively. Additionally, credit card apps provide an easy way to manage your bills, track your rewards, and stay on top of your expenses. Credit card apps like Bajaj Finserv, Cred, PhonePe, Paytm, and Gpay are some of the best in India, providing a range of features to help you manage your finances effectively.
