Learn To Use Credit Card Responsibly

  • Updated on: 12 Dec 2023
  • Published on: 9 Jun 2021
Learn To Use Credit Card Responsibly

Knowing how to operate credit cards responsibly is crucial, as they come with high interest rates if you do not pay your bills on time. Credit cards provide a convenient way to finance your purchases and offer more benefits and rewards than a debit card. However, using them without clearing your outstanding balance can result in a debt trap. 

Read on to learn about how to use a credit card effectively to enjoy its long-term benefits. 

Purpose of Credit Cards

Credit cards are a form of payment that enables you to make cashless transactions up to the assigned credit limit. When you swipe the card, banks loan the money to you to make a purchase. Since this is essentially a debt, you have to pay back the amount according to the issuer’s terms. 

Unlike loans that require fixed monthly payments, you can repay the outstanding balance of a credit card in different ways. For instance, you can pay the minimum amount due for a month or make a complete or partial repayment. 

A grace period, usually up to 45 days, allows you to pay back the total amount without interest. If not paid on time, the remaining balance amount will attract interest every month. If you fail to pay during the next billing cycle, this amount is added to the outstanding dues and continues to accumulate high-interest charges. As such, you can end up with a large debt, which affects your finances and creditworthiness. 

That said, grace periods are a blessing because you can utilise a temporary interest-free loan. As long as you pay the entire bill amount on time, the banks won’t levy interest on your purchases. So, it’s important that you use your credit card responsibly and pay the bills on time and in full. 

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Tips for Using Your Credit Card Responsibly

Here are some tips for using credit cards smartly:

Read the Terms in the Agreement

After opening a new credit card account, carefully review the customer agreement. Also, read the disclosure. Keep all the details related to the repayment terms, due dates, interest rates, etc. in mind before you proceed.

Avoid Credit Card Debt

You can prevent accumulating massive debt on credit cards by exercising restraint while using the card. Avoid exhausting your card limit frequently. Doing this will also help protect your credit scores as your credit utilisation ratio. This ratio indicates how much credit you have used against your total limit and generally, the lower the ratio, the better your score.

Pay Your Dues on Time

By paying the issuer back on time, your credit history will show repayment discipline. Since credit scores depend on this aspect, a good record can have a positive impact on your score. 

If you have a bad score, you may need to pay higher interest for future loans or credit cards. One way to avoid this and pay your bills on time is to set up payment alerts or sign up for automatic debits from your bank account.

Also Read: Benefits of credit card

Try to Clear the Bill in Full 

Paying minimum dues in every billing cycle helps avoid penalties. However, you will still have a large balance left that will keep accruing interest. The additional interest amount can make it difficult to clear the debt. 

So, try to pay your credit card bill in full every month, or at least pay off as much as you can, over and above the minimum amount due. 

Protect Your Credit Card

By storing your credit card details safely and out of reach of other people, you can secure the essential information to prevent fraud. Never share details regarding your card number, CVV, or OTP codes with anyone.

Always report a lost or stolen card immediately and block the card to prevent unwanted usage. When notified of unauthorised purchases, always report them to the bank immediately. By doing so, the bank won’t hold you responsible for the unauthorised use of your card.

Review the Statements Every Month

One important tip on how to use a credit card wisely is to be aware of your spending limit, annual percentage rate, interest rate, hidden fees and more. Your credit card statement will contain all these details. Make sure to check your statements regularly to notice any updates related to these details or irregularities in transactions.

By using your credit card frequently, you can maximise the reward points you can earn. However, avoid doing so if your existing dues are high. In such a case, it is advisable to limit your credit card use until you repay the outstanding balance.

Monitor Your Credit Score

By monitoring your credit score, you can see what purchasing patterns hurt, maintain or increase your score. This also helps identify mistakes or fraudulent attempts that could hurt your credit score.

Advantages of Using Your Credit Card Responsibly

By being responsible and vigilant, you can make the most of your credit card. First, using it and repaying it on time every month helps you build an exceptional credit score. A good credit score provides you access to more credit card options and affordable loans. Secondly, cards even offer perks like cashback, travel benefits, reward points and more. You can thus save as you swipe and enjoy a range of privileges. 

To access a card that offers all these perks, get the Fibe Axis Bank Credit Card. It is India’s first numberless credit card that links to your UPI ID and provides higher security. Moreover, it is a lifetime free card that offers up to 3% cashback, dining discounts, fuel surcharge waivers, free airport lounge access and more. Download the Fibe Personal Loan  App or register on our website to apply now! 

FAQs on Using Credit Cards Responsibly

What is the responsible way of using a credit card?

If you are wondering how to operate credit cards responsibly, you can employ certain strategies. For instance, set up auto-payments for timely repayment, use only up to 40% of your credit limit, use your card at trusted merchants only and monitor your credit card usage to stay within your budget. 

What are the things you should consider when using a credit card?

When using a credit card, you must evaluate certain factors like the card’s Annual Percentage Rate (APR), fees and charges, cashback and other rewards and more.

What is the safest way to use a credit card?

If you are thinking about how to use a credit card wisely and safely, there are certain tips you must follow. For instance, don’t trust anyone else with your credit card number and expiry date, change your PIN regularly and don’t share it with anyone, check your statement carefully, and use the card at trusted merchants only.


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