Credit Card Benefits

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Use Credit Cards Smart to Save Money

 Every time you use a credit card in most cases the bank awards you get a number of reward points about 2 points on every 75 INR spent. The number of reward points increases with the number of purchases made with the credit card. This reward points can be converted into money. If you spend 16 lakhs a year to pay your bills using your credit card then you get 16k points which are converted to INR 5820. This is all money saved.

Using credit cards allows you interest-free billing. Most credit cards have a maximum interest free period of 50 days. This means that if your bill arrives on the 18thevery month any transaction done on the day after, the 19th, will be subject to the interest-free period.

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In the consecutive days, the interest-free period will shrink by a day. To get the most benefits from the interest-free period any transaction should be made on the day after the billing as it is day 50 of the period. For example, if you buy a new TV worth 1lakhs the day after billing you will not be charged interest for that 1lakh for 50 days. This money if carefully invested can yield returns within those 50 days. One should, however, avail to the Auto debit facility to ensure the money is repaid from your account before on the last day.

If you make around 3 luxury purchases in a year and convert them into EMI’s you can save quite a bit of money. Most of the banks in India have a feature that allows their customers to convert their purchases into interest-free EMI’s for 3, 6, or 9 months. Any expensive purchases made on the day after billing can be subject to a free credit for 10 months

A number of credit cards have a cashback offer that comes into play when you shop from certain retail stores or booking plane tickets from certain online flight portals. For example, if the cashback offer from a specific online flight portal is INR 500 when you travel 5 times that year you save INR 2500. It has thus helped you save a substantial amount of money.

Banks sometimes offer discounts and offers on purchases made using credit cards. You can also get a 1or 2 percent discount on purchases made using your credit card. Accessing this benefits can allow you to save over a thousand a year.

Using a credit card can help you pay more than just the minimum amount required. In some cases after billing one may not be able to pay the whole amount. It is however advised to pay more than just the minimum amount. Most lenders like when the customers pay just the minimum as they end up collecting a lot of money in the long run. For example, you buy a pair of jeans for INR 6000 and pay just the minimum amount every month which is 3 percent of the total amount a month which is INR 180. You will end up paying for the jeans for 17 years even without considering any other purchases made.

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