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Kolkata: Credit cards are worshipped for two things. One, they extend quick money even if you don't have it in your account at times of need and two, they can shower on the user a lot of benefits such as discounts on shopping, dining, redeemable reward points, free access to airport lounges, cashbacks on use above a limit etc. The point to note is that there are a few ways of maximising the reward points and cashback.
Personal finance experts say there are benefits to be have when shopping and making utility bill payments. There are some tactics which begins from the stage you apply for a card. Advisers say that one should scout for benefits that credit cards carry in the market and then settle according to your usage patterns. Setting auto pay of utility bills is one use that most recommend. Let's have a look at other tips for maximizing the benefits available through these cards.
One could consider the following tactics with one's credit card. It starts from a stage when you are yet to apply for a credit card. Therefore, read carefully.
Credit cards aligned to spending habits: The search should be in sync with your lifestyle. If you are a common person, who has to take care of grocery and utility bills, you should choose your card accordingly, and should not choose a premium card. In such cases you could consider cards such as SBI SimplySAVE, HDFC Bharat Cashback, or Axis Bank ACE since they are designed for routine purchases. But if you need to buy petrol or diesel frequently, you can go in for co-branded cards such as Indian Oil Citibank Credit Card or BPCL SBI Card which offer fuel surcharge waivers etc.
Category based or platform specific: A few cards offer discounts or reward points on some pre-designated platforms. For example, if one makes regular purchases in Flipkart, one can consider Flipkart Axis Bank Credit Card. SBI Card PRIME or HDFC Regalia are cards that incentivize eating out by offering discounts on dining. Moreover, many banks offer cards that offer discounts or extra cashback on Amazon, Flipkart, Myntra, or Paytm.
Auto pay for utility bill: It's a standard tactic to set up auto pay for utility bills such as electricity and telephone. These standard auto-debit instructions help one to put the card in frequent use and the user does not need to remember that he/she has to pay the utility bills on time to avoid a default and pay penalties.
Welcome and renewal bonus: When scouting the market for a credit card, one can also have a look at the welcome bonus and renewal benefits. A few credit cards offer a number of goodies such as free vouchers, flight miles, or memberships as sign-up perks. When quantified these can add up to a cool amount.
Special reward points: There are credit cards which offer special rewards when they are used via a few pre-determined merchant tie-ups -- say one can earn a far higher reward point if one eats out at a particular restaurant, or stay in a particular chain of hotels or book tickets of a particular airline. If the card offers such benefits, one should not let them go unused.
However, one has to keep one particular point in mind always when using a credit card. Credit cards carry the highest interest rate among all tools/loans in the retail loan space. Rates can vary between 30% and 50% per annum. Therefore, if one is not vigilant, one can easily step into a debt trap.
