Own a credit card Not only is it rare, but it is also close to a financial necessity in today’s times. However, before you get a credit card, keep in mind a number of basic rules; for example, unpaid installments accrue a very high interest rate, sometimes as high as 3-4 percent monthly or 36-48 percent annually.
Also, keep your bill around 30 percent of the price. overall credit limit To maintain a good credit score, here are the key features of credit cards that every new card user should know.
Six key things you should know about credit cards:
YO. Credit limit: Every credit card has a set limit. Make sure you don’t exceed it. For example, if your credit card has a limit of ₹5 lakh, then you should keep the outstanding bills only below this limit.
second. Credit card utilization rate:The ratio of credit card usage to its total limit is known as credit card utilization ratio. This ratio should be kept below 30 percent. For example, if your credit card limit is 10 lakh, try not to spend more than that. ₹3 lakh on the card.
III. Credit Score:The settlement of credit card bills and their Credit Score They are directly proportional to each other. Therefore, when you pay your bills on time, your credit score improves, which translates into a higher credit limit for your card.
For example, if your credit card limit is ₹5 lakh and continues to pay the bills on time, chances are your The credit limit will be increased In addition to, say, ₹7.5 lakhs.
IV. Interest-free period:When you buy something with your credit card, you get a 45-day interest-free period. But once that period passes, interest starts to accrue.
V. Minimum owed versus total owed:When you receive your credit card bill payment, you have two options: pay the minimum due or settle the bill. It is always recommended to settle debts rather than just pay the minimum due. When you pay the minimum due minimum dueinterest is generated on it.
VI. Cash Withdrawal: Although credit cards allow users to withdraw cash, it is best to avoid this practice. The interest charged for withdrawing cash using a credit card is often exorbitant, so it is not rational.
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.