How to make most out of your Credit Cards

You would no less be tortured by calls for various banks for personal loans and credit cards. The normal reaction is "Sorry I dont need it". Well today I would ask you to pause for a while and think before your response. What should be your reply, you would come to know about it by the end of next paragraph.

Enormous revolution and LIBERALIZATION in banking sector has taken competition to a level wherein we are using bank's funds for around 45 days at zero % interest rate. But every bank has its billing cycle and if your big shopping is due on last few days of billing cycle, you end up loosing full credit period. So is postponing spend is the solution ? I would say "NO". The solution to this is to keep multiple Credit Cards of various banks with various billing cycle. So every time you go for shopping, use the credit card which had last billing cycle. This way you will be able to utilize full credit period offered by banks.

So check out your wallet, how many credit cards you have and next time you get a call from bank for credit card, just say "Yes I need it."

However word of caution :-

1. Credit Cards need to be kept under safe custody to avoid any kind of misuse
2. Keep a track of payment cycle without fail, else you will end up paying charges more than you save

When banks are offering period credit for 45 days, why should customer leave such options. So go ahead and pluck low hanging fruits.

We all carry Money destroyers(Credit Cards) with us

Technology has changed our lives drastically in last one decade. Starting from Telecom revolution, IT Sector revolution, BPO and outsourcing sector, Banking, Insurance to online shopping. Things are one click away. Undoubtedly technology has made so many things faster and possible that we have silently agreed to ignore its side effects.

There were times when we had to stand in long queue for cash withdrawal in government bank and bear with inefficient and arrogant staff. Now a days we live in an era where we can not even imagine a situation like this and whole credit goes to technology revolution in our country and competition from private sector. Cash withdrawal and shopping on credit are just a matter of few moments.

Well those are the real benefits we have and no one would deny it. However I see Credit and Debit Cards as money destroyer. These cards made our purchasing power very strong and enable us to take instant decisions on spending money. I believe that these cards should be used basis planned expenditure rather than decisions taken in the haste. One need to really look into the REAL Purchasing power of his/her portfolio before shelling out the money through Credit/Debit cards. I give some advantage to Debit Card over Credit Card.

Credit Card is a devil which goes beyond your net-worth and shows you a rosy picture, however when questions comes to the payment of bills we realize that we have spent more than what we were suppose to spend.

How do I manage my Credit Card usage :-

1. A detailed plan of big spends in the beginning of the month
2. Identify source of funds for such expenses
3. Any unplanned spend, if needed would be done in Cash. This helps me a lot because if my Cash in hand is not allowing that spend then that means either I need to postpone the expense or drop it.
4. Keep some buffer in Credit Card limit for friends meet etc

Never :-

1. Convert your big amount expenditure on Credit Card into installments. Bank will charge you an interest of around 35 to 40% annually. It is done so intelligently that no one realizes the exceptionally higher interest rates
2. Delay payment of due bills. You will end up paying extremely higher charges of delayed payments

Some more facts :-

1. If in case your payment has got delayed, make a call to Customer Care and you will get late payment charges reversed. It happens due to competition from other banks.
2. Loans on Credit Card limits are extremely high. Simply ignore it.
3. If you do not have funds to pay Credit Card bill, take personal loan and pay it on time. Else late payment charges would be way higher than interest on personal loan.
4. Encash bonus points accumulated on your spend before it expires. In small letters banks print the last date of encashing points after that your accumulation of points will start from Zero.
5. Keep Credit cards in safe custody.

Credit Card in everyone's life has become a vital part, the need of time is to manage it properly and efficiently. Have Happy and Safe Shopping.