Credit Card Tips for Beginners – Smart Usage & Safety Guide

Hello everyone! This guide is specifically for new credit card users, especially beginners. Based on my analytics, I noticed that most of my viewers are between the ages of 17 to 24. Plus, many people, including those who are otherwise financially wise, hesitate to use credit cards. For example, my father has never made a single credit card transaction in his entire life, and several of his credit cards were closed due to inactivity.

In today's blog, I will explain what a credit card is, how to use it, and provide useful tips and guidance to help you use credit cards without any worries or hesitation. My aim is to make your credit card experience seamless and help you enjoy the benefits.

Please share this post with anyone who is hesitant to use credit cards or new to them so they can also benefit from the information.

Why Do We Use Credit Cards?

Here are some main reasons why people use credit cards:

• To buy products on EMI.

• To use in emergency situations.

• To replace debit card expenses with credit card expenses, so that you can earn rewards on the same spending.

• To achieve milestone benefits and get extra perks.

• To keep your bank account statements clean.

• To avoid fraud transactions, as credit cards are safer compared to debit cards.

• To avail extra discounts during sales and offers.

• To redeem reward points for free flight tickets.

• To enjoy movie benefits.

• To get free airport pickup, drop, and meet-and-greet services.

• To earn benefits on fuel, grocery, and utility expenses.

• To access airport and railway station lounges for a comfortable rest.

• To build a credit score.

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Tips for New Credit Card Users

Align Your Billing Dates

Have all your credit card bills aligned on the same day. You can call customer care and request a change in the billing date.

Limit the Number of Credit Cards

Try to keep as few credit cards as possible to manage them efficiently.

Paid vs. Lifetime Free Cards

Both paid and lifetime free cards have their benefits. If a paid card offers more value based on your usage, it's better to go for it rather than having multiple free cards. However, as a new user, it is recommended to start with a lifetime free card.

Track Your Expenses

Keep a separate record of your credit card expenses and try to utilize less than 30% of your credit limit.

Pay Bills Before the Due Date

Pay your credit card bills 5-10 days before the due date to avoid late payments or transaction failures.

Simple Bill Payments

Initially, don't chase rewards for bill payments. Use simple apps like CRED to pay bills as they provide regular notifications and reminders.

Identify Your Spending Categories

Identify your monthly spending patterns, such as frequent payments in specific categories, and choose a credit card that offers maximum rewards for those expenses.

Verify Payments

After paying through any app, visit the bank's app the next day to check if the transaction has settled. You can also check your outstanding balance through WhatsApp banking services.

Always Pay in Full

Never pay only the minimum due. Always pay your bill in full to avoid high interest charges.

Check Statements Regularly

Keep an eye on your credit card statements to spot any unauthorized transactions or additional charges, and report them immediately.

Monitor Your Credit Score

Check your credit score and loan accounts every 3-4 months to ensure no loans are taken under your PAN details. You can use apps like OneScore for this.

Turn Off International Transactions

Always disable international transactions unless required. For domestic transactions, set a limit based on your monthly spending. For example, if your credit limit is ₹1 lakh but you spend only ₹10,000 monthly, set your domestic limit to ₹10,000.

Avoid ATM Withdrawals

Never withdraw money from an ATM using your credit card, as it incurs additional charges. Disable ATM withdrawals on your credit card.

Set Up Auto-Pay

Enable auto-pay for your credit card bills whenever possible to avoid missing payments. This will help you maintain a good credit score.

Reduce Contactless Transaction Limits

If you enable contactless transactions, reduce the per-transaction value and set a daily limit to prevent misuse.

Avoid Unnecessary Spending for Rewards

Don't make unnecessary expenses just to earn reward points.

Choose Cards Based on Your Needs

Avoid getting unnecessary credit cards just because they are popular. Select cards that match your spending habits and categories.

Understand Credit Card Interest Rates

Money borrowed through credit cards is not imaginary. You have to repay it in full. Unlike personal loans with lower interest rates, credit card interest rates can be as high as 30%. Therefore, always spend on your credit card only if you have the money to pay it off.

Final Note

Most importantly, use your credit card only for expenses that you can pay using your debit card or UPI. Do not fall into the EMI trap. This is the most important point to maximize your rewards.

By following these tips, you can use credit cards wisely and enjoy their benefits without any worries.