Here are 5 credit card habits that help you use your credit cards wisely in 2020 amidst Covid 19 Crisis

Credit cards come handy at times when you want to purchase something at a particular point in time and might not have the cash to pay for the same. You can learn about credit card in case you don’t have one and would come to realize that there are multiple options available to choose from. But, the best credit card in India differs from person to person and greatly depends on their financial situation.

Read this article to understand 5 credit card habits that you can keep in mind. These habits will greatly help when you choose the best credit card in India for yourself so that you can use it wisely.

Credit cards give customers a pre-determined limit which is set and he/she can then use to pay for the purchase without having to pay for it in cash or issuing a cheque. The credit limit gets decided by the financial institution and that limit depends on the individual’s credit score and monthly income. Considering that so many people opt for credit cards, it’s important to be aware of the best credit card in India that will help you decide which option will be the best for you. But, there are some habits that everyone should keep in mind irrespective of which card they opt for, and they are as follows:

1)    Creation of a Budget and timely payment of bills
When is making a budget ever a bad idea? The budget helps you highlight what expense would you have then you have to allocate income for and at the same time review if they are even worth spending on. This exercise ensures that you get an understanding of how much do you have available to spend, and how much debt can you really afford to take on and repay. It’s also extremely important to make sure you pay bills on time as non-payment or delay in payments impacts the credit score. Not to mention the late fees this situation will attract, which is again not something you’d prefer when you are trying to minimalize spending. 

2)    Borrow what you can pay back
1/3rd of your income should be used to pay back your debts which usually includes credit cards, mortgages, or loans, and this is the general rule of thumb. It’s important to make sure that one borrows only what they can really payback. This will happen when you make sure you are tracking how much is spent on a monthly basis and stick to the budget carved out for yourself.

3)    Credit card balances
There are situations where one cannot pay the credit card balance in full and that’s completely okay but, make sure the payments are made in time on a monthly basis. The payment made should be more than the monthly payment, whenever possible. One should aim to keep the individual balance below around 30 percent of your own credit limit at any time. In case you pay your balance in full every month, getting too close to your credit limit can cause a reason for the potential lenders to worry.
      
4)    Welcoming technology
With the constant updation of technology, multiple opportunities are at our disposal to learn everything using our phones or computers. There are applications for pretty much everything and if there isn’t an application, there are websites that can help you! Almost everything is digitized and it has become extremely easy to become aware of everything around us. Credit card companies and banks have made tools that are easy, customer-friendly, free, and most importantly reachable 24*7 to keep a track of the following:
●    Online, mobile and phone access to your personal account with bill payment options
●    Bank Statement alerts by text, e-mail, or phone
●    Instant, free transfers to and from your other accounts
●    Free transfers to your account from most other banks and brokerage firms

 It’s important to welcome such services with open arms and make the best use of them. Our lifestyle is fast-paced and these services help us get ahead of our limitations on the time front. 

5)    Credit Score Reports
Owing to the fast-paced lifestyle that we live with, sometimes essential things like checking your credit score report can skip your attention. But, this has to change as we have to be careful to catch any errors or any potential incorrect information that might be present in our credit score report. The incorrect information could be in the form of fraudulent accounts that you don’t identify with, loans that are paid off already but are on “open” status and any personal information such as your address, employer, or marital status which may be mentioned wrongly. When you take notice of them,you’d be able to take measures to fix the situation and proceed accordingly. 

With so many credit cards in the market, the journey to find the best credit card in India can be a long one. But, no matter which credit card you choose, the pointers mentioned above can prove useful and can ensure you use your credit card wisely.