7 Credit Card Rules Everyone Must Follow

cards can be an immense boon when you hit a rough patch financially, offering a much-needed breather and enabling you to manage expenses you might not have been able to make otherwise. They provide a convenient financial buffer at the end of the month and give you the means to get back on your feet without relying on others. However, to make the most of this powerful financial tool, it’s essential to follow certain guidelines.

Credit cards can be a financial lifesaver when managed responsibly. They offer convenience, the ability to handle unexpected expenses, and opportunities to earn rewards. However, mismanaging credit cards can lead to debt and financial strain.

7 Credit Card Rules Everyone Must Follow

Here are seven credit card rules everyone must follow to use them wisely and maintain financial health:

Pay Your Balance in Full Each Month

One of the most crucial rules of credit card management is to pay your balance in full each month. Carrying a balance incurs interest charges, which can quickly accumulate and lead to debt. Credit card balances should be paid on or before the due date to maximize benefits. By paying off your balance, you avoid interest charges and maintain financial health. Conversely, waiting to pay the balance or making only the minimum payment allows interest to accrue, which can spiral out of control and lead to significant debt. Additionally, missing a payment not only results in interest charges but can also hurt your credit score. By staying diligent with your payments, you ensure that your credit card remains a helpful financial tool rather than a burden.

Make Payments on Time

Always make your credit card payments on time. Late payments can result in fees, higher interest rates, and damage to your credit score. To ensure you never miss a due date, set up reminders on your phone, circle the date on your calendar, and/or ask your spouse to remind you. Some credit card companies may charge interest and late fees if you delay your payment by even a day. Your poor memory could really cost you if you’re not careful! Consider setting up automatic payments to avoid the risk of forgetting. By staying diligent with your payment schedule, you can maintain a healthy credit score and avoid unnecessary charges.

Avoid Cash Advances

It is not advisable to use your credit card to withdraw cash. Cash advances come with high fees and interest rates that start accruing immediately. Most credit card companies charge a hefty fee for cash withdrawals, and unlike regular purchases, there is no interest-free grace period. If you must take a cash advance, do so only when absolutely necessary and repay the amount as quickly as possible to minimize the financial impact. Avoiding cash advances will help you avoid these costly charges and maintain better control over your finances.

Manage Your Credit Utilization Ratio

Credit utilization is the ratio of your credit card balance to your credit limit. Keeping this ratio below 30% is advisable, as high utilization can negatively impact your credit score. For example, if you have a credit limit of $10,000, try to keep your balance below $3,000.

Another factor to consider is your credit utilization ratio, which is the ratio of your current credit card outstanding balance to your credit limits. The ideal ratio is considered to be 30%. If your ratio is consistently lower than the ideal, it means you are underutilizing your card. If it exceeds the ratio regularly, it means you are overly dependent on your card. Both scenarios can result in a lower credit score. To maintain a healthy credit score, aim to keep your credit utilization ratio at the optimal level.

Redeem Rewards Wisely

Many credit cards offer rewards programs, such as cashback, points, or travel miles. To maximize these benefits, choose a card that aligns with your spending
habits and use your rewards strategically. However, don’t overspend just to earn rewards; the interest and fees can outweigh the benefits.
Credit cards often come with attractive loyalty programs, but many consumers forget to redeem their reward points for curated products, air miles, or gift vouchers. Redeemed rewards translate to money saved and an elevated lifestyle. Check your rewards via net banking or on your monthly statement, and make sure to redeem them before they expire. By being mindful of your rewards and redeeming them timely, you can make the most of your credit card benefits.

Monitor Your Statements Regularly

Regularly reviewing your credit card statements is essential to check for errors or unauthorized transactions. This practice helps you stay on top of your spending and detect any issues early. If you notice any discrepancies, report them to your credit card issuer immediately. Credit card companies can make mistakes, so it’s crucial to check your statements for duplicate charges or incorrect late fees, especially if you’ve paid on time. Regular monitoring helps ensure your finances are in order and prevents potential billing issues.

Report Lost or Unauthorized Transactions Immediately

It’s crucial to report a lost card as soon as possible or any unauthorised transactions on your credit card. Although you can make a case to prove that your card was stolen and used fraudulently, it will take time and effort. In the meantime, the thief could use up your credit and severely damage your credit history.

If you misplace your credit card or notice a transaction you didn’t make, inform your bank immediately. You can contact your bank via an ATM, branch, phone, or online banking. The bank will block your card and prevent fraudulent transactions.

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By following smart credit card rules, you can enhance your credit score and gain access to better credit products. Axis Bank offers a range of credit cards tailored to a spectrum of consumer needs and lifestyles. Whether you’re looking for rewards, convenience, or specific perks, there’s a card for you. Applying online and using video KYC can expedite the activation process.

Additionally, Axis Bank provides a variety of co-branded cards for popular retail stores, airlines, and other brands. These cards offer benefits such as loyalty programs, fuel waivers, dining and shopping deals, and perks like free airport lounge access. With the right credit card, you can enjoy a host of benefits while managing your finances smartly.


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