What are 5 tips for effective credit card use : A credit card is a type of financial instrument that allows you to spend money on credit. It is a plastic card issued by banks or financial institutions. When you make a purchase with a credit card, you are borrowing that amount and you have to repay that amount later within a fixed time frame.
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Components of Credit Card
To understand what a Credit Card is, it is Crucial to know it’s Components
- Card Holder’s Name : The name of the Person to whom the card was issued.
- Card Number : A Unique 16 digit Number use for transaction.
- Expiry Date : Date after which card is no longer valid.
- CVV : A three digit number on the back of the card used for security in online transactions.
Below are five tips that you can use to make the most of your credit card
- Pay You balance in Full to avoid high interest Chareges : Pay your credit card dues on time so that your CIBIL score remains good and your credit card limit also increases
- Do not use Full Limit your Credit Card : Do not use more than 30% of your credit limit. This improves your credit score and can help you get better loan opportunities.
- Track Your Credit Card Expenses : Keep track of your expenses when using a credit card. To ensure you don’t go out of budget, you can track your expenses on a monthly basis.
- Choose Your Credit Card : Choose a credit card that offers better rewards and benefits as per your expenses and lifestyle. It is important to compare the benefits and fees of different cards.
- take Advantage of Credit Card : Avail rewards points and cashback offers when shopping with your credit card. This can give you additional benefits.
Conclusion
Credit Card, when used wisely, can be valuable tools for managing your finance, earning rewards, and building a strong credit history. Use the credit card properly and take maximum advantage of it, if you use the credit card properly then you will never face any problem
Frequently Asked Question (FAQ)
A credit card is a payment card issued by financial institutions, such as banks, that allows you to borrow money to pay for goods and services from merchants who accept cards for payment.
Benefits include convernience, rewards programs, purchase protection, and building credit,
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