5 Credit Card Habits to Follow For Healthy Financial Records


Tips for using a credit card appropriately

India has witnessed a boom in credit card spending, especially after the outbreak of the Covid-19 pandemic.

According to the Reserve Bank of India data, in May, the total credit card spending in the country reached an all-time high of Rs 1.14 trillion. From reward points and discounts to cashback using a credit card, people prefer online transactions these days.

Credit Cards also enable cardholders to spend money without worrying about their bank balance.

However, being careless with your credit card expenditure can also adversely impact your personal finances.

Practices such as delaying the credit card bill payment will not only attract penalties but also impact your credit score. Hence, it would be best to remember certain things before swiping the card.

Here are some tips to help you get wiser with credit card usage:

Check statements

Swiping the credit card is easy, and so is checking the statements. But, many still tend to avoid checking their credit dues and statements every month.

Adopting this habit can help you keep track of your expenditure. This will allow you to spot errors and rectify them before they negatively impact your credit score.

On-time repayments

Paying your credit card bills on time must be your utmost priority. Late bill payments can lead to penalty charges and increase the interest rate on your outstanding bill. Avoid this by setting up reminders for bill payments.

Don’t swipe it so often.

Credit cards have some benefits, but swiping them too often can leave a bad impression on your lender.

Relying on your credit card for small expenditures indicates that you depend significantly on credit. This can affect your creditworthiness.

Lenders always watch your credit card transactions and may refuse to approve new loans if you have a huge outstanding credit card.

Monitor Credit Utilisation Ratio (CUR)

CUR is the ratio of credit you have used as compared to the total credit given to you by the lender and is generally expressed in percentage.

Maintaining a healthy credit score is important as a high CUR may cause your lender to assume that you are bad at managing finances and depend highly on credit.

To avoid this, pay off your credit card balances on time or opt for a higher credit limit from the bank.

Spend within limit

Spend only when you are sure about repaying the amount on time. Overspending on unnecessary purchases can rack up a huge credit card bill that you may struggle to pay later.

It is better to keep the expenditure under the limit, which will also reflect in your credit report and prove beneficial while seeking loans.



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