How To Use Credit Cards Responsibly
Today, almost everyone is in possession of one or more credit cards.
But does everyone understand how to use credit cards responsibly ; doesn’t
Some credit card holders only know how to spend on their credit cards till the credit limit is
Others know only about using credit cards for shopping and bill payments. Still others are too afraid to use
their credit card. A lot many are unaware how to use credit
So what is it that you should know how to use credit cards?
The first thing is the fact that whenever you use your credit card to make a payment, you are borrowing that
amount from someone (credit card supplier in this case).
Thus you will need to return this borrowed money to the credit card supplier within a specified period of time
failing which you will incur a late fees and interest on the borrowed amount.
So, you should be careful about your credit card payments. Besides the late fee and interest,
they also affect your credit rating and we know how important the credit rating is.
A bad credit rating can lead to rejection of mortgage applications, loans, subsequent credit cards and even a
You should also make it a point never to exceed 70-75% of the credit limit on your credit card.
Not only does this shield you from getting into a credit card debt trap but also protects your credit rating.
Credit cards need protection against fraud and every credit card user should be aware of the ways to protect
their credit card(s). There are generally a set of very simple precautions that the credit card holder need to
All the credit card companies supply instructions to this effect at the time of credit card delivery. These
include things like signing at the back of credit card, reporting theft, PIN/Password protection etc.
Besides the security related instructions, it’s also important to read through the instructions related to the
benefits on your credit card in order to realize the full potential of your credit card.
These include discounts on shopping, travel, car rentals etc. Then there are cash back options as well which
have become very popular lately.
There are some really good benefits for travelers too. These include things like free travel
insurance and baggage protection.
Besides the regular benefits, the credit card suppliers generally include some joining benefits too for the new
customers. The joining benefits are generally in the form of discount vouchers.
Another important thing to note is the various kinds of fees and commissions charged by your
credit card supplier. Besides the annual fees and APR there are other services too which attract a fee or
commission e.g. there is a fee associated with cash withdrawals; similarly there is a commission associated with
foreign exchange transactions.
All these charges are clearly mentioned in the instructions booklet that you receive with your credit card and
any changes to these are separately communicated by the credit card company.
Credit card suppliers keep coming up with a lot of different offers throughout the year. Be on the lookout for
these offers. Some of them might be of interest to you.
Generally, you will receive intimation about these offers at your billing address or your email address too.
Almost all credit card companies have a membership rewards program too wherein you earn points
for any payments made using your credit card. Once you have accumulated enough points, you can exchange them for
Very often the catalogue of these gifts is also supplied at the time of you joining the membership reward
programs. It’s important to note that there might sometimes be an annual fee associated with the membership rewards
So you have just learned more about how to use credit cards responsibly.