Important Tips for Using your Credit Cards Responsibly

Posted on Thursday, May 18th, 2023 | By IndusInd Bank

Important tips for using your credit card responsibly are as follows: 1) understand the card terms 2) know when and how to use your card 3) pay your dues in full 4) pay your dues on time 5) plan and time your purchases 6) Keep a low credit utilization ratio 7) enjoy the rewards!

Ever since it first came into being, the credit card has revolutionised the way people transact, allowing cardholders to borrow funds on a short-term basis and make cashless payments for goods and services.

Today, the statement that your credit card can be a really helpful financial tool ‘if used responsibly’ has acquired such ubiquity, it has almost become an adage for credit card-users to swear by.

Contrary to popular opinion, using your credit card prudently entails much more than making timely repayments. It’s also about maximising benefits and improving your credit profile.

Whether you are an existing credit card user or plan to apply for one, here are 7 tips for using your credit card in the most beneficial, responsible way possible.

1. Understand the Card Agreement & Terms

When you begin using a new credit card, make sure to carefully go through the credit card customer information in the agreement. Keep an eye out for information regarding your billing cycle, fees, due dates, and interest rates. This way, you’ll be better prepared to use your credit card wisely and responsibly.

2. Know When & How to Use the Credit Card

There are so many uses of a credit card. It is easy to get tempted into making purchases on impulse. But using your card ‘responsibly’ means steering clear of frivolous purchases and using your card for needs, not wants. If you are using it to buy big-ticket items – such as a smart T.V. or laptop – you could always consider the option of paying back via credit card EMIs so as to avoid a financial strain.

3. Pay your Outstanding Dues in Full

Making the minimum payment on your credit card helps you avoid penalties and is better than paying nothing at all – but it’s not enough. You should ideally pay the outstanding balance in full. This will help you avoid the heavy interest rates and keep your credit score high. Besides, you’ll always be free of the stress of carrying a balance.

4. Make Timely Repayments

Making timely repayments – before the due date – on your credit card is just as important as repaying in full. Not only is your payment history an important factor in determining your credit score, missed or late credit card payments will lead you to incur late payment fees and interest charges – a double whammy you definitely want to avoid.

5. Plan your Purchases

Every credit card has its own billing cycle. Planning and timing your purchases while keeping the bill generation date of your credit card in mind can greatly help you maximise your interest-free period. For instance, if you have an IndusInd Bank credit card and you make a purchase immediately after your credit card bill is generated, you can actually enjoy up to 50 interest-free days. However, the interest-free period is only applicable if the total amount due has been paid in full.

6. Maintain a Low Credit Utilization Ratio

The credit utilization ratio refers to the percentage of the total available credit you are using. Ideally, the outstanding balance on your credit card should always be lower than 30% of your credit limit. This means, if your limit is INR 1 lakh, you should keep your balance under INR 30,000. This will ensure a perpetually healthy credit score.

7. Enjoy the Rewards

For most people, the best part about having a credit card is the world of discounts and privileges it opens the door to. An IndusInd Bank credit card, for instance, earns reward points for you on every transaction and fetches bonus reward points on achieving milestone spends. Additionally, the reward points on your IndusInd Bank credit card do not expire, giving you the freedom to use them whenever you wish. Other benefits include complimentary lounge access at airports, year-round discounts on eating out, movie tickets, grocery shopping and plenty more!

Take your Pick from a Range of Credit Cards!

Different people have different uses of a credit card. That’s precisely why IndusInd Bank offers a diverse array of credit cards, each with a unique set of features tailored to meet varying lifestyle needs and preferences. From a range of credit cards with zero joining fees and zero annual fees to a host of cards with premium lifestyle privileges – IndusInd Bank has something in store for everyone.

Add to this a 100% paperless, 3-step online application process and access to a world of exclusive memberships, discounts and rewards. Apply for an IndusInd Bank credit card now!

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.