Indian credit card customers have demonstrated good repayment habits in recent years. The Economic Times praised their payment behaviour by highlighting that 78% of 1,100 consumers in eight key cities were able to pay their monthly bills in full. Moreover, credit cards are proving to be an important payment method for Indian customers as the number of cardholders continues to rise. So, if you want to join the rising number of credit card holders, you can follow the lead of your peers through the following tips.
Build Your Credit Using a Secured Card
A secured credit card is the best option for individuals who want to improve their credit score. The application for this credit card is very easy, since you won’t need to submit your credit score for the approval of the bank or the card issuer.
In our article ‘How Does a Secured Credit Card Work’ we pointed out that you would need to deposit a fixed amount as a collateral to be able to use your card. The limit of your credit card would also be around 80-90% of your deposit’s amount. To improve your credit score, you should only utilise less than 50% of your credit limit.
Choose Cards Based on Your Needs
A credit card does not only allow you to borrow funds, it can also provide you with a lot of perks. Financial institutions offer a wide variety of credit card features, which is why you should study all of your options before deciding which credit cards you may need.
If you want to enjoy more benefits, Petal notes that owning various credit cards may be a good idea. You get access to more credit with various benefits. For instance, frequent flyers can earn points by using a credit card that tracks your airline miles. You should also consider getting cards from issuers that are honoured by the retailers that you frequently buy from. That said, it’s best to only stick to one or two credit cards if you are having a hard time sticking to payment deadlines and can’t manage your cash flow well.
Use Your Credit Wisely
As a beginner, start healthy money habits by spending below your credit limit. You will be able to save money and raise your credit score by learning when and how much you should spend using your credit card.
First-time credit card users should be mindful of the amount they’re spending because financial institutions track the credits you utilise compared to your overall limit. Experts recommend that beginners use no more than 30% of their limit so that they can maintain a low utilisation rate. Your credit limit will increase once your credit score improves, but cardholders are still advised to use less than 30% of their credit limit.
Pay Your Bills on Time
Follow the lead of responsible Indian credit cardholders by paying your bills on time. Times Now News stated that your diligence in making payments on time will save you from late fees and increased interest rates. Be a responsible cardholder by paying the full amount on time. You should also consider automating your payments for the monthly minimum amount so that you can’t miss the deadline.
Protect Yourself From Fraud
The Hindustan Times reported that 6,785 credit card fraud cases occurred in India over a span of eight years. Banks have stated that the losses within this period amounted to as much as ₹243.95 crore.
Protect yourself from becoming the next fraud victim by not sharing your account number, unless you’re transacting with a reputable business. Moreover, you must read through your credit card bill and double check that you recognise all the listed charges before paying what is due. As soon as you spot unauthorised charges, call the customer service of the card issuer and report the issue.
You can enjoy more benefits from your card by building your credit, choosing your cards wisely, and spending less than your limit. As a new cardholder, you can prevent problems by protecting your card information and paying your bills on time.