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Five tips on how you can maximise your credit card benefits
Amid the rising prices of goods and services because of inflation, cutting down on expenses to cover essentials isn’t the only way to free up cash. In order to pay off debt or save on costs, one can avail yourself of several valuable perks with the help of credit cards despite being a new applicant.
Moreover, if someone already has a credit card, they may be already sitting on multiple rewards, offers, or even spending benefits that could make a difference.
Here are a few ways to maximise value from a credit card:
1. INTRODUCTORY OFFERS
If someone has good credit (690 or higher) and there’s a big expense in the future, they might consider financing it with a credit card that offers a 0% charge on introductory annual percentage rate on purchases and a sign-up bonus.
And as long as they pay off the balance on time, they would be saving a significant amount on interest charges and potentially also recover some of the purchase cost with the bonus.
Furthermore, good credit can also help pay off existing debt through a balance transfer credit card as it may lower costs and allow to transfer of high-interest debt from another issuer for a lower interest rate.
One can also find promotional periods for balance transfers that run under two years. In addition, one may not need to apply for a new credit card to get such a deal as some card issuers also provide targeted balance transfer offers to existing cardholders.
2. BUY NOW, PAY LATER OPTIONS
With many domestic banks and other financial organisations offering built-in “buy now, pay later” options on their platforms, one could easily use those as benefits to pay off eligible purchases in instalments for a fixed fee or even at a 0% interest rate.
The availability of these BNPL options can make it easier to make purchase plans that could save money if their fee or interest rate is cheaper than one’s existing credit card’s normal interest rates. Most of these offers don’t even require a credit check, and some also offer an additional reward or cashback on purchases on their platform.
3. REWARDS ON PURCHASES
A credit card that offers a cashback on purchases can also help reduce the pain of rising prices. For example, if one spends Rs 5,000 a month at the supermarket, a credit card that offers an additional cashback of 5% back on groceries, and fuel could help gain Rs 250 back in rewards each billing cycle. This cashback, over a year, adds up and can be redeemed for cash or even in form of additional offers.
However, do note that if your current credit card doesn’t offer rewards for frequent spending categories like dining out or groceries, one could also opt for another one which better suits their spending.
4. MERCHANT-SPECIFIC DISCOUNTS
Many credit card issuers are also offering discounts or rebates when their credit cards are used to shop with specific merchants in categories like everyday purchases, fuel and travel. These specific offers could be found on your card issuer’s website and one could easily opt for them either via net banking or phone banking.
Many benefits are only available through a credit card, like cell phone insurance, additional cashback, and instant discount among others. One can avail of these benefits by using your card’s coverage plan for damaged or stolen devices that are purchased through them.
For example, some credit card issuers offer theft or accidental coverage plan for electronic devices as complimentary if purchased through them. However, the claims process for such instances might be complicated but will be still worth it since no extra money was paid for this benefit.
Moreover, it should be noted that not all credit cards have similar offers or benefits as those others may have. Also, one should be aware of the terms and conditions of their card usage before availing of any of the benefits and to find out which benefits your credit card offers.