Monday, 9 April 2012

How to handle your credit card and credit card bill

Credit card is wonderful instrument of credit which allows you cash free purchase and balance free purchase. Even If you do not have balance in your bank account you can purchase whatever you want through online or offline. Yes it is a convenient instrument of credit. But at the same time it is a dangerous instrument also.

We can hear so many live stories those who become insolvent with credit card and even it causes divorce, suicide etc. If you handle this wonderful plastic instrument of credit with care you can avoid all these and can save money with it. Following are the tips you must follow while handling credit card

Know your credit card: You must know all terms and conditions of the credit card which you have. You must know the credit limit of the card, billing date, cash withdrawal date, interest of the amount due, balance transfer, due date of the payment, interest on EMI, additional charges, hidden charges, annual fee etc about your credit card.

How many credit card you own: You may have more than one credit card and they may be from different banks. Write down the names and numbers of all credit cards you have, minimum payment of each card and interest rate. Please note down the helpline number of each credit card also which may be useful when you want to contact the credit card customer care.

Rate of interest: You can consider the credit card with lowest interest rate first for reducing the cost of credit card and related payments.  So have a thorough knowledge about the credit card interest rate.

Pay highest interest first: While paying your credit card bill, give priority to pay off the credit card with highest interest and highest penalty. You must pay off the full dues and if you could not afford, do not forget to pay at least the minimum dues. But remember that you have to pay interest not only for the remaining balance after the minimum payment, but also for the further purchases from the first day of the purchase.

Priorities your credit card payment: By any reason pay off your credit card bill and credit card dues first, because it costs you more than any other loan. When you get the credit card bill, note down the dues and date of payment any visible place to pay it in time.

Request for a reduction in interest rate: You can request to your credit card provider to reduce your interest rate. They may accept your request, if you are a long time customer. They issue another credit card with reduced rate of interest which will reduce your credit card cost a little bit. If they refuse your request, go for another credit card provider with low interest and transfer balance from high interest credit card to low interest credit card.

Increase your credit score: Remember that timely payment of your credit card bill increase your credit score and when you apply for a loan this credit limit is a plus point to sanction you loan amount. Timely payment of your utility bills and loan repayments also will increase your credit score.

Customer is the king: Do you know that in this business world customer is the king? You can continue as the king only if you handle things wisely and carefully, unless the king will be a slave of credit card debt. So handle your credit card with care.

Consider credit card as cash: When you buy things with cash you purchase only necessary items. But with credit card, you may have the tendency to buy unnecessary items and costly items. Consider the credit card as cash and buy things only when you need it.

Avoid add on cards: Credit card companies lavishly offer add on cards to your spouse and kids. But be aware about the dangerous of such add on card. One of my friend kept add on card, in the name of his spouse, in safe custody and never taken it out. Sometimes you also should practice this.

If you follow these instructions and all terms and conditions of your credit card provider wisely you can make benefit from credit card. You can save a lot with credit card such as interest free credit period, reward points, partnership card, cash back offer, discounted price offer, convenient online purchase etc. So enjoy with your credit card and do not allow accumulating the credit card debt.

How to Handle credit card

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