Timely payments crucial for credit card holders

Credit card usage picked up momentum unlike before. Statistics released by the RBI in May this year showed a 23 per cent increase in credit cards when compared to the corresponding period last year. As of now, India accounts for over 7.7 crore credit cards; when compared to 2018 there is a 100 per cent rise in credit cards use. Not just the number of cards, their usage has also increased multiple times. Hence, a beginner should look at precautions before using one.

Hyderabad: The new age financial firms and institutions are giving increased access to all sorts of loans in recent years in a bid to reach out to all sections of customers. Even then, they cannot substitute for credit cards. The need for taking a credit card has also gone up because of its broader usage in everyday life. Considering this, one should do thorough research before taking a credit card.

A close look should be taken at banks, which are coming forward to provide credit cards and what benefits they offer. If you do more online shopping, a credit card with better rewards and offers may be taken. This would prove useful to turn bills into EMIs at no interest when purchasing home appliances.

After taking a credit card, you should make timely payments without fail. Any lapse in this will lead to heavy penalties. The burden of interest would be higher if just the minimum due is paid in monthly payments. If bills are not paid in time, interest and fines will increase. A credit card user should make sure not to use more than 30 per cent of the credit available.

This will indicate one's financial discipline. Lesser spending will enable the ability to pay bills regularly. The credit score would go up if the credit usage ratio is lower. If there is a 750 credit score, it is easier to take loans. Unregulated spending may lead to failure to pay bills, which would adversely affect credit score.

After Coronavirus, digital transactions picked up speed. Online purchases increased considerably. At the same time, cyber frauds are on the rise. Some are taking credit cards without full knowledge of how to use them. Lots of transactions are being done without our knowledge these days. Hence, there should be no negligence in using the cards.

The card number, CVV and OTP should not be shared with anybody. Cards should be always with the card holders. A two-layer security is a must for card payments. It's not just enough to take a credit card. Timely payments of bills and avoiding needless interest and penalties are more important. Only then one can make the most out of credit cards.