10 Credit Card Commandments You Ought To Follow

By Kishore Sabareeshan | August 6, 2018

Want to master the art of using your Credit Card to your advantage? Follow these simple Credit Card Commandments that are sure to bless you with a blissful credit experience!

10 Credit Card Commandments You Ought to Follow

Anger not the gods of credit for they shall smite those who use their Credit Cards without any foresight or responsibility. Ok, maybe smite is too harsh a word, but credit can either be your friend or foe, so read on and follow the path to righteousness with these essential commandments!

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Thou shall clear your Credit Card balance

Banks will try to float the idea of conveniently setting up a minimum payment auto-debit routine for you. Do not surrender to these temptations, my child. Clear out balances as and when you can; this way you won’t let your interest accumulate into a big fat hungry monster! The earlier you clear your debts, the more you’ll be able to enjoy the boons of a Credit Card.

Thou shall not turn a blind eye to payment dates

When it comes to Credit Cards, defaulting is a cardinal sin. Not only does it leave you with a penalty fee, it also harms your Credit Score and reduces your credit-worthiness in the long run. Remember that even one late payment can leave a black mark in your credit history, so whatever happens, just ensure your payments take place as per the agreed-upon date – this will assure you peace of mind.

Thou shall not ignore reward points

What’s the point of owning a Rewards Credit Card if you’re not going to leverage the benefits that lie waiting for you? As a Credit Card user, you can collect rewards with every swipe or transaction, so it’s always good to know how you can utilise them as per your lifestyle. For instance, if you’re a frequent traveller, it makes sense for you to go in for a travel Credit Card, because cards from this category generally reward you with points that you can use to book flight and hotel rooms, thus helping you save on your overall travel costs.

Thou shall utilise credit wisely

Now, just because you have the power, it doesn’t mean you start abusing it. Credit is a wonderful tool provided you know how to use it appropriately. This especially applies to your credit limit. Now, let’s say your limit is Rs. 1,00,000 – this doesn’t mean you go and max it out. The more sensible way of using a Credit Card is assuring your usage stays below 30% of your total credit limit. Why? Well, because once you reach your credit limit, you won’t be able to even use your Credit Card without clearing your balance.

Thou shall keep a tab on thy Credit Score

So, your Credit Card has been approved because your current Credit Score is decent. Does this mean you say goodbye to your Credit Score and go on a shopping spree? Nope! Your Credit Score is one reference point for you to gauge how creditworthy you still are. Now, why is this important? Well, let’s say, you’re considering a home loan in the next 2 months. In the meantime, you swipe your Credit Card to buy a yacht or two (just saying) without caring a damn about your Credit Score. Now, any heavy debt, unless closed promptly, will affect your Credit Score. Should you delay paying back your credit card bill, your credit karma will simply say, “I saw that” and hit you where it hurts; your Credit Score. If that happens, don’t even think about applying for a Home Loan after that – you may want to move into your yacht, maybe?

Don’t panic; you can always avoid such situations by firstly using your Credit Card judiciously, and secondly utilising your Credit Score as a guide to help you make better financial decisions. Sounds doable, right?

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Thou shall avoid cash advances

Beware the forbidden fruit that is the cash advance. The transaction fees and interest that are connected to cash advances can leave you paying much more than you actually borrowed. We understand that it can be quite tempting to go in for a cash advance when you’re in a sticky situation, but we highly recommend you dodge this bullet.

In such cases, you can actually Check Your Eligibility for a Short-Term Loan instead.

Thou shall not swipe your Credit Card just because you can

Though we’re pro Credit Cards, we’re not pro misuse of Credit Cards. It takes discipline and a general sense of finance to understand and use Credit Cards the right way. If you’re someone who generally cannot resist swiping for everything you lay your eyes upon while at the mall, you’re probably not cut out for a Credit Card. On the other hand, a Debit Card can really work for you, because it will make you feel the pinch every time you swipe.

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Thou shall choose Credit Cards that suit you best

Each of us makes our lifestyle and entertainment choices, so why not do the same with Credit Cards? Today, Credit Cards are available in various categories wherein each card is specially designed to benefit a particular target audience based on lifestyle and habits. This is why it’s important for you to choose a card that really makes a difference to you, because what’s the point of getting a card that adds no value to your lifestyle.

This can be illustrated well with an example. Let’s say you’re a movie buff; let’s also say you don’t travel a lot in a year. Now, while considering a Credit Card. It would be really unfruitful to blindly grab any Credit Card, because should you end up with a Travel Credit Card, you’re not going to benefit at all – unless you decide to become a nomad overnight. The second disadvantage of shopping for Credit Cards as if they’re chocolates is that you don’t even know if there are Credit Cards in the market that better suit you. To understand this, let’s jump back into the example. Imagine you actually take time and research your options before picking up a Credit Card; chances are you’re bound to pick up a card that has a lot of benefits for movie-goers, such as the Kotak PVR Gold Credit Card – now, wouldn’t this be a much better choice?

Additional Reading: Are You A Movie Buff? Here Are Five Amazing Things A Credit Card Can Do For You

Thou shall not cancel your Credit Card before utilising thy points

Thinking of cancelling your Credit Card? Wait. Be sure to check if you’ve actually redeemed all the points that you’ve earned over the years. While people generally make sure their bills are paid and there are no dues before going ahead and cancelling their card, many overlook the points and hidden gems that are worth utilising before breaking up with their Credit Card.

Thou shall be aware of your Credit Card’s protection features

When we think of Credit Card features, most of us typically rush to the rewards. While this is natural, it also makes sense that you browse through your card’s features and learn about the protections you’re entitled to. For instance, many cards come with perks such as travel insurance, extended warranties, price protection and much more; it just makes sense for you to know what benefits you’re entitled to, agree?

Feeling wise? How about exploring some Credit Card offers?

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