Credit Cards Help and Advice

How To Get The Most Value From Your Credit Card

How To Get The Most Value From Your Credit Card

Which Credit Card To Use To Optimize Value

With a massive 1.3 billion population, it is not surprising why the slightest policy changes in India have a ripple effect on the global economy. The government’s recent decision to promote a cashless or ‘less-cash’ economy, therefore, has piqued the interests of not only home-grown economists, but renowned international think-tanks as well. In India, however, this has once again brought to the forefront the apparent credit card revolution that has been brewing quietly for a while now.  In spite of all this new focus on credit cards, a significant chunk of India’s 2.68 crore credit card users are still unaware of the huge benefits that come with using cards over cash.

For starters, take this simple anecdote. Just last month a friend went online and bought a smartphone using a credit card on EMI facility. The credit card company instantly credited him Rs. 2000 cash back as part of their holiday promotional offer. Using this cash back, he went ahead and ordered a Sennheiser headphone and a memory card, thus making a flat saving of Rs.2000! Sounds incredible, right? Incredible, but surprisingly commonplace if you know how to take advantage. Freebies like that are just a drop in the ocean of what a great credit card can offer you, let us take a look.

Choosing the right credit card for maximum benefit

Applying for a credit card online has become so much easier these days, maybe people apply for the first one they see without much thought. The huge competition among credit card companies to woo customers has resulted in an ecosystem that literally spoils customers with multiple choices. However, apart from the offers and discounts, there are a few initial factors you might want to keep in mind while making that choice for yourself.

• Annual fee: If you are a light spender and uses your credit card sparingly, there is no point paying a huge annual fee. Most people should select a card that has zero annual fee, which means you don’t end up paying more than what you use. Some premium travel cards have a fair annual fee and get added value in the form of airline lounge access, waived baggage fees, and more. The point is, if you see a card has an annual fee, make sure you can extract more than that cost in card value during the year.

• Offers: Not all credit cards are for everyone. You need to ascertain your expenditure categories and accordingly choose a card that will assure you maximum benefits. You will read more about it in later part of this article.

• Late charges and penalties: Although it is highly recommended that you never default on your credit card bill payment, things go out of hand at times. Therefore, before you choose a card, make sure you are aware of the penalty and interest charges and the redressal mechanisms the bank has in place to help you out.

• Customer experience: It wouldn’t be such a bad idea to spend some time online reading customer reviews and experiences. An offer might look great on paper, but the reality could be altogether different. Perhaps a bank might have notoriously difficult customer service. It’s always smart to read beyond the advertising material and see the details, reading card reviews is a good move.

• Fine print: As with all banking services, make sure you read the fine print thoroughly. Read and understand the various charges, how the reward system works, how to redeem your reward points, withdrawal limit, credit limits and so on. In case you need further assistance, you can always contact their 24X7 customer care centers.

Optimizing Value Every Time You Spend

Now you know what to look for before applying for a card, now let’s show you how to get the best value out of it with every swipe. There are cards for every type of spender, so it’s key to determine what type of spender you truly are. Cards often offer double reward points for using the card at a specific place, or a branded card might earn you rewards redeemable only at that brand. Thanks to the e-commerce boom in India that has driven competition sky high, everyone is showering offers to attract and retain customers. While branded cards offer tremendous value for that brand, usually the best cards offer rewards no matter where the purchase, and have flexible redemption options. Here are the most common types of cards you may find, and keep in mind some cards mix and match these perks to very rewarding results.

• The Flyer card: Do you travel more than a handful of times per year? Almost all banks offer a credit card in this category and are targeted at people who fly regularly. They offer flyer miles which the customer can then redeem for money or use for free travel. It also comes with other perks such as VIP lounge facility in the airports, privileged check-ins, discounted stays at affiliated hotels etc.

• Fuel Cards: These are aimed at customers who travel a lot using their vehicles. Using a regular credit card at a petrol pump invites a 2.5% surcharge on the transaction, which can end up as a significant spending over the month. By opting for fuel cards that has a fuel surcharge waiver, you are not only saving big, you are also spared the need to carry huge amounts of cash during travel. The Indian Oil Citibank Platinum card is an example of one of the better fuel cards out there.

• Grocery cards: Consider this. There are credit cards, such as the Standard Chartered Manhattan card, that offer flat 5% cash back on every purchase you make at supermarkets. For instance, if the monthly grocery bills amount to Rs.5000, your credit card company gives you a cool Rs.250 just for using their card! If that doesn’t make you use your credit card at supermarkets, I don’t know what will!

• Dining cards: With discounts ranging from 10-15% at some of the finest restaurants, these are a must have for people who craves for exquisite culinary experiences. Sometimes called “lifestyle” cards, there is no shortage of these types of cards in the India marketplace.

• Movie cards: Movie buffs out there, take your pick from a long list of credit cards custom made for you. Ranging from 50% cash back  on movie tickets to buy 1 get 1 offers, these satisfy your movie cravings without burning a hole in your pocket.

Apart from the above, using a credit card can be rewarding due to the following reasons as well;

• Build great credit scores: Apart from the above, one major advantage of using credit cards is that they help build your credit score / credit rating. It can also help you rebuild your credit score if it has gone for a toss in the past. Be smart with your spending, always pay your bills on time and in no time you will have an excellent credit rating. This can come very handing in the future if you want to apply for a loan. The bank will definitely pull up your credit scores and with a healthy score; your loan application will go through in no time.

• Excellent expenditure management: Keeping track of your expenditure is so much easier when you use a credit card. Unlike cash transactions, wherein you may have to keep the bills or receipts or maintain a ledger, using credit cards leaves an electronic train which appears in your bank ledger. Further, there are numerous wallet management apps for your smartphone that can keep track of your spending based on categories.

It is quite clear that using credit cards are not just about cashless transactions or online payments anymore. Credit cards want your business and are ready to reward you for it, so by all means let them! You stand to gain a lot and save a lot  if you use cards wisely. If you don’t have a credit card yet, please have a look for one you like in our Card Finder! If you already have a card and rarely use it, now you know what you have been missing out on!

Viveka Rao

About Viveka Rao

Viveka Rao is post grad in finance and a freelance writer here at CreditSmart. A love for shopping and travel rewards has fueled her interest in personal credit, and making the most of rewards programs. She writes to educate other consumers in making great financial choices.

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2 Comments

  • Hi Syed! If you have already paid at CIBIL then you probably created an account and such. I’m sure the information your seeking is easily viewable after your CIBIL login, perhaps you can download it from there. I would contact someone directly at CIBIL if you are having trouble, I’m sure a paper report is available.

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