Credit cards are an effective and efficient way to access credit. Not only do they help you with funds and controlling your spending, but they also provide you with numerous rewards that you can use on exciting trips, restaurants, and much more.
Much like you can smartly manage a credit card to boost your credit score, you can also maximize the rewards with some tips and tricks. With these rewards, you can save money on your bills at restaurants, on flight tickets, and while shopping. Also, your credit score highly influences your rewards. Read on to learn how!
Tips to Maximise Rewards and Savings with Credit Cards
Practice the following steps and get the most rewards and savings!
Compare Different Types of Credit Cards and Pick the Best One
The first step towards building a high credit score is to decide on the kind of credit card you want to opt for. Similarly, the card you pick determines how much rewards and savings you can expect. There are different credit cards available that different financial institutions like the Axis Bank Insta Credit Card, HDFC Platinum Plus credit card, Citibank cashback credit card, and many more offer. To understand which card is best suited for you, understand your spending, know where you spend most of your money, and then choose your card. You can initially start with a regular card and then upgrade to a premium one. Premium cards offer better rewards but are harder to maintain.
Look Out for Credit Cards with a Flexible Reward System
Ensure that you opt for credit cards that have easy-to-redeem reward systems. If you are new to credit cards, even simple cashback can be beneficial and easy to track. When you are building your credit score from scratch, you might not get a lot of rewards. However, when you get a better credit score, you will get better rewards. If you are using credit cards for the first time, you should avoid co-branding credit cards, such as airline cards, because they reduce your spending flexibility. Opt for credit cards offered by companies with a flexible and wide range of reward systems.
Look Out for Beneficial Sign-Up Credit Card Offers
Numerous credit card companies offer numerous sign-up or introductory rewards. While financial institutions might offer these rewards just to attract customers, they can be lucrative as well. Narrow down the credit cards and the financial institutions that offer them, and then look at the sign-up bonus they offer to make your final decision.
Consider Credit Cards That Complement Each Other
While it is usually advised not to opt for multiple credit cards, you can opt for credit cards that complement each other. For example, you opt for a card that offers you a reward when you buy fuel for your car, while the other offers you cashback when you buy from a particular store.
Understand and Track Credit Scores and Bonuses
Keep track of your credit score and the rewards that are offered by your financial institutions. You can do so by simply noting them in a notebook or checking your lender’s website or app.
Compare The Redemption Options on the Credit Cards
Getting rewards is great, but their flexible redemption is important too. Do not miss any rewards and redeem them within their expiry date to maximize your benefits!
Keep an Impressive Financial Profile and Credit History
You will be eligible for cards with better features and more attractive reward programs only if you are a responsible and reliable borrower. Here are two key tips to ensure a good credit score and history!
- Avoid any Late Payments: When you opt for your desired credit card, ensure that you pay your credit bills on time. Any late payment can lower your credit score by a huge amount. You can set up reminders or set up an auto-payment system with your bank to pay off your dues. If you think you will not be able to pay off the entire amount as a whole, you can also opt for the EMI facility.
- Do not Exhaust Your Credit Limit: To maintain a healthy credit score, ensure you stay within the credit limit on your card. Extending your credit limit can increase your credit utilization ratio, reducing your credit score.
You can use the CIBIL score app or website to check your credit score. You generally get one free credit score check per year. The CIBIL score app will charge for further checks.
Credit cards are a useful tool for making transactions without any cash. The rewards and offers they provide make them even more alluring for borrowers. If you pick your credit card wisely and religiously maintain your credit score, you will get lucrative rewards and offers and improve your savings too!