Credit Cards are wild things. They love you passionately and allow you to buy all the things you desire. Essentially, Credit Cards sweep you off your feet. And, if you do not pay close attention, you’ll realise that you have been swept off your feet only to be dropped in a quagmire of debt.
But, this painful experience can be avoided if you are a little careful with your Credit Card. It’s tempting to fly high with your plastic buddy, but you need to take control and make a safe landing rather than crash land.
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Now, what exactly do we mean by ‘taming’ your Credit Card?
Credit Cards boost your purchasing power. You can buy things you don’t have money for and make repayments in affordable EMIs, and also take advantage of cool rewards and cashback programs.
So, you not only get higher purchasing power, but you also get rewarded for spending. Sounds like a fairy tale doesn’t it? Well, you can continue basking in the wonder of this particular fairy tale as long as you pay your monthly Credit Card bills on time, or else this story could end up with quite an unhappy ending.
This is why you need to tame your card to keep it from turning your life into debt-ridden hell. You need to know when to stop making purchases, so while you should certainly let a Credit Card bolster your purchasing power, you should be equally careful to not let it drag you into debt.
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So, how do you tame your Credit Card? This is what you need to do.
Evaluate You Credit Profile
Check Your Credit Report
A credit report is a record of your financial behaviour. It tells lenders about the number of Credit Cards and loans you are servicing or have serviced, and also tells them how regular you have been with the payments.
There are four main bureaus that receive your information from banks and other financial institutions to create your credit report. The popular ones are CIBIL TransUnion, Equifax and Experian. Regardless of which bureau you extract your credit report from, your score will essentially be the same.
Withdrawing your report from one bureau at a time will allow you to withdraw your report thrice a year free of charge. When you withdraw your report, scan it carefully for errors. See if a payment you have made is missing or if any of your personal information is incorrectly mentioned.
These errors can kill your chances of getting a loan or a new Credit Card. It’s advisable to extract your credit report before applying for a loan or a Credit Card. An awareness of your score will allow you to bargain for better interest rates and fix any errors in the report, which otherwise could lead to a rejection of your application.
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Check Your Credit Card Interest Rates
Make sure you check the interest rates and other charges applicable on your card from time to time. This will allow you to make a switch to a new card if the rates get exorbitant. If you are grappling with Credit Card debt, you can opt for a balance transfer.
A balance transfer allows you to transfer your existing Credit Card debt to a new Credit Card offering a lower interest rate. Be aware, when you opt for balance transfer, the low interest rate might only be applicable for a while. Make sure you clear your debt before the rates rise.
It is also wise to keep an eye on new Credit Cards in the market. New cards come equipped with better offers and rewards programs. For example, if you are using a Fuel Card, you can move to a Travel Credit Card if you feel that your frequency of travel has increased. In short, pick a Credit Card that suits your financial and lifestyle needs.
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Read Your Credit Statement
Get into the practice of reading your Credit Card statements regularly – EVERY MONTH. We know it feels tedious, but it has many benefits. Firstly, reading your statement will tell you if there are any unauthorised charges on your card. Unauthorised charges are a good indication of your card data being stolen. Time to block your card and get a new one.
Other than unauthorised charges, card statements reflect on your spending habits. While you are at it, also look for new information on interest rate changes etc.
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Step 2 of taming your Credit Card involves keeping it safe.
Keep Your Credit Profile Looking Smart
The first thing to do is to keep a good credit profile. How do you do that? Simply follow all the three steps mentioned above. Make sure you do not over spend on your card and always ensure you pay your bills on time.
Keep an eye on your credit expenditure and cut down on unnecessary expenses. Just because a Credit Card increases your purchasing power, it doesn’t translate to spending what you don’t have. Use a Credit Card wisely and you’ll be happy. Stay away from debt.
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Keep Your Card Details Safe From Thieves
There are people out there just waiting to get their hands on your card details. So what must you do to keep your card safe?
When shopping at a store keep your card close to you. You do not have to flash it while waiting in the queue. Also, when punching in the PIN, be careful that nobody is watching your number.
When you are shopping online, be careful of dubious websites. Use your card only on trusted websites. It is also wiser to not store your card number on websites. Protect your card fiercely. It is you duty to ensure its safety.
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If you are a chronic Credit Card user who always spends more than you can afford, then maybe it’s time to seek help. If you are in a situation where you are deeply in debt, then speak with a person with sound financial management skills. They could tell you how to clear your debt burden in a systematic way. Put your ego aside if you want to sustain a healthy relationship with your Credit Card.
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These are just a few simple ways you can manage your Credit Card. Follow them and you will never be in Credit Card trouble.