Credit Card for Beginners whether to Consider Boon or Bane
The 21st century is wildly known as the Technological Era. We are in the second decade of the century but the changes and growth in technology are mesmerizing. In the same way, credit cards were introduced in the late 1950s but their usage increased as the world saw more technological advancements in the field.People were very skeptical in the usage of Credit Cards and they were mainly used for international travel and to buy heavy expensive goods. But as banks started offering extra security measures and additional benefits on their usage from the beginning of the 21st century, more and more people are using this type of plastic money.
Credit Cards are now considered as a Boon. Their easy availability and hassle-free use are changing its status from luxury to necessity. One can use them online or in-person, in any part of the world. They have succeeded to bring the world closer and accessible in financial terms.
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| Credit Card Beginners |
Some banks also charge card renovation fees every year. By having a credit card, you can pay for goods and services even if you don't have enough funds in your bank account at the time of transaction. You just pay the total billing amount later when you have funds.
If you pay your card bills on time, it will increase your credit score drastically, which will eventually help you in the future if you decide to take a bigger loan. Timely payment of credit card bills showcase your ability to pay off your debts on time and it works as a major trust factor in borrowing heavy sums of loan from a bank.
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| credit card Beginners |
A credit limit is basically a number of amounts which is regarded as the spending limit Various e-commerce websites, restaurants, shopping outlets, and salons get into agreements with leading banks to offer discounts and reward points to their customers upon purchasing goods or services from them. This helps them to increase their business and customers by offering them discounts
All the banks which offer credit cards to its customers have come up with comprehensive security systems to protect the account information of their card users. This card comes with a special magnetic chip on its back, which protects the secret numeric information of the cardholder.
Also, if one uses such a card to purchase goods and services, the money isn't deducted from their account quickly. This way if someone misuses your card, you can inform the bank to block the card and would not have to pay for the wrongful transactions done on the card.
Credit cards can be used to withdraw cash from ATMs just like debit cards. But banks charge transaction fees of ATM withdrawals done on these cards. So unless it's really necessary, you should avoid withdrawing cash from ATMs using these cards.
Many people fear that having a credit card may turn them into a shopaholic. But you have to control yourself to avoid spending more than you will be able to pay back. You should avoid going on unnecessary and uncalled for shopping sprees.
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| Credit Card Beginners |
Credit cards come with many benefits like reward points, cashback offers, and discounts. You should use these benefits, neatly. Know where you can use these benefits and how it will prove profitable to you.
Do not forget to check your monthly credit card bill. This will help you're to keep track of your expenditure. It will also help you with your monthly financial planning.
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Some of the ways in which you can improve your score are
Pay EMIs on time
The cardinal rule of good credit history is to maintain your payments in time. This factor plays a crucial role in your score and any delayed payments adversely affect your score. Make sure that your bank account is funded well in advance of the EMI due date, so that there are no bounces and unnecessary penalties due to the bounces.
Using your credit limit
Use your credit limit on your credit card prudently, because overutilization or maxing out your credit card month on month can affect your credit score. Also not paying your outstanding due amount every month and just paying the minimum amount due monthly can affect your score.
For example, if your credit limit on your card is Rs. 50,000 then make sure you are not spending more than 50% of the same ie not more than Rs. 25,000 on your credit card.
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| credit card Beginners |
Any credit hungry behavior ie applying for too many credit cards or loans within a short span of time can affect your score adversely. Plan your credit requirements in advance.
If you are planning to buy a house, make sure that you don't apply for any other types of credit like a personal loan or car loan in the preceding 3 months, so that getting an approval for your home loan is easier and smoother and your eligibility is higher. Too many inquiries in your credit report is a sure way to get your loan application rejected by lenders.
Check your credit report periodically
It is a good practice to check your credit report periodically get issues like this sorted by raising the issue with the bank and bureau and sorting it out immediately. Sometimes, loans and credit cards that you have never taken might also reflect in your credit report, in which case, it is best to highlight the issue to the bureau and get it resolved so that it doesn't impact your score negatively.
Credit cards are surely a boon to people who know how to use it and maintain it. Credit cards are making the world easy, accessible and cashless. So if you are having doubts about whether to get a credit card or not, I think you should definitely get your plastic money today!
Thank You for Reading, I hope that you found this article of Use.
Peace, Light And Love.
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