Why is it better to use a credit card than cash?

Why is it better to use a credit card than cash? Do you know the reasons?

At first glance we may think that using cash for payments and purchases will always be the best option, but it’s not entirely the case and here we show you why it might be better to use your credit card instead of cash.

Why is it better to use a credit card than cash?

Security

This is the main reason for using credit cards instead of cash. With this payment method you have the peace of mind of having anti-fraud protection in case of loss, theft or fraudulent use.

If you lose your credit card by calling the bank, you will be able to regain control of your money and information, whereas this is not possible with cash.

In addition, having a card is completely safer than having all the money in your wallet, but it is always advisable to keep it in a different place than the card.

Discounts

There are a variety of discounts and benefits available when paying by credit card. Some credit cards, for example, refund the difference of the purchases, you can also win prizes or points redeemable for the proper use of these.

The discounts earned can be used in stores, to accrue miles for travel or to have some kind of assistance.

Convenience

Having a credit card is more convenient than having to think about how much money to bring for a specific situation, or for example having to use exchange houses if you are traveling in another country. Someone with a credit card will never have these problems, as they will be able to access their money at any time and at any exchange rate.

However, it is logical that it is always recommended to carry some cash with you, for small payments or for purchases at street stalls, which usually do not receive cards.

It is also very convenient for the customer to make purchases and pay for them in instalments and over a long period of time, as best suits their finances.

Controlling Expenses

All purchases and expenses are recorded when paying with credit card, and can be reviewed by the customer in your transactional portal or through your mobile phone, showing detailed information, even by purchase categories.

Other Reasons

Making payments with credit or debit cards is the best way to avoid unnecessary fees and commissions, especially when you are out of your country, as you can save on currency exchange fees and cash withdrawals at ATMs.

They allow for easier tracking of expenses, a task that is quite complex when shopping with cash, as many purchase invoices and receipts accumulate, and sometimes it is almost impossible to track them.

Credit cards are not as dirty as bills and coins, which generally pass through a large number of people, bringing with them hundreds of bacteria.

It is also very important to mention that when using credit cards for payment the following month the user is financing at a 0% rate.

8 Free Things You Get With Credit Card: Money, Miles, Insurance, Vouchers & more

Everyone wants credit card as it offers many exciting features which are not available in any other payment option such as cash, cheque, debit card, etc. and thus helping in saving money.

But do you know that there are free things that come along with credit card? If not, then continue reading.

Free Money

Let’s start with objective of credit card i.e. FREE MONEY. The most important benefit or we can say the objective of the credit card is to offer FREE MONEY to the user every month for spending on almost anything. Free money is a magnet which attracts users. How much money is offered by the card companies varies with each card and depends on the income, risk profile, CIBIL score, and other important factors.

FREE Credit Card

There are some cards which carry ZERO annual and joining fee. So basically what you get is a card for free. Although there are conditions associated to avoid these two fees, such as minimum spend either annually or in the first few days of card issuance, but there are cards with no such requirement.

Free Grace Period

In addition to free money, user also gets a free grace period to make the repayment. This is the duration typically 21 days in which user has to pay the money used in a month. So for e.g. if your monthly billing cycle ends on 20th of each month, then your grace period to make bill payment would be around 10th of the next month. This is quite enough time to repay the money, as there is no interest charged during this period. But in order to get a good CIBIL score, you should not wait for grace period and instead pay the bills fully and before the due date.

Free Insurance Cover

Card companies partner with insurance companies and offer users FREE INSURANCE COVER. Typically types of insurance offered are health, travel, personal accident, life, lost baggage, etc. So any unfortunate event happening, cost would be borne by the insurance companies. But remember that insurance offers on credit card comes with various terms and conditions and user has to follow regular claim process in order to receive the claim amount. So basically twin benefits are offered – free coverage with no premium to be paid.

Free Airport Lounge Access

This especially is mainly offered to premium card customers. Lounge access gives travelers a peaceful place on the airport to sleep and relax, away from the crowded places at the airport. In fact, some cards also allow users to bring guest users in the lounge. Although this feature may not interest regular card users but for a frequent traveler, this is highly valuable as they are offered luxury lounge access.

Check out travel cards for Indians going on an international trip.

Free Air Miles

Credit cards also offer free travel points (or air miles) to the frequent flyers and spends made on the card. These accumulated points can later be used for buying flight tickets for free.

No Fee on Certain Services or Free Vouchers

There are cards available in the market which carry ZERO base fare charge on flight booking. Or offer free shopping or food vouchers. These vouchers are offered by SBI SimplyCLICK card, Axis Bank Neo, FBB SBI STYLEUP and others.

Free Movie Tickets

This is especially for the movie lovers. Cards such as KOTAK PVR Gold offers 2 free movie tickets every month at PVR movie theatres.

But always remember, the word FREE is GIMMICKY tactic to entice users either in credit card/shopping etc. Because ultimately credit card is one of the biggest money making income source for the card companies.

Unless someone has no monetary benefits, why would anyone offer money for FREE in today’s world, right?
And this money is recovered in the form of charges associated with each card such as:

  • Interest on late payment or non-payment of full balance
  • ATM cash withdrawal
  • Joining and annual fee
  • Over limit penalty
  • Balance inquiry
  • Mobile alerts
  • Cheque bounce and many others

Important point to note before selecting the right credit card is to read the terms and conditions associated with all the free features mentioned above.

2018: 17 Cashback Credit Cards in India with Offers

Ever imagined getting paid back on the purchases/spends you make? This is known as cashback in the financial glossary and is offered through credit cards. Cashback credit cards lets users earn certain amount of money back in the card account after using the card on eating out, watching movies, fuel purchase, making purchase online, etc. depending on the issuers.

There are many credit cards offering cash backs in India offering money back. Here’s the list of best cards:

Cashback Credit Cards in India

Card IssuerCard NameCash Back Offered
CitibankCiti® Cash Back Credit Card5% on movie ticket purchases, telephone bill payments
HDFC BankMoneyBack Credit CardRedeem accumulated reward points as CashBack against the outstanding amount on your Credit Card. (100 Reward Points = Rs. 20)
Axis BankMY Choice5% on any of the two - Dining, Fuel, Electronics, Utility Bills, Travel, Supermarkets
Axis BankMY Zone25% on online and box office movie ticket purchases
Axis BankPlatinumUpto 25% on online and box office movie ticket purchases
Axis BankNeo10% on online shopping at jabong.com
10% on mobile recharge done via the Freecharge mobile application
ICICI BankInAFlash50% on any online transaction done (upto Rs. 500)
ICICI BankHPCL Credit Card2.5% on fuel purchases
Standard CharteredManhattan Platinum Card5% on supermarkets and departmental stores
20% cash back on Uber spends upon minimum credit card spends of INR 15,000*
Standard CharteredSuper Value Titanium5% on fuel, phone and utility bills
State Bank of IndiaPlatinum cardsRs. 150 on Rs. 1,500 Fuel spend
State Bank of IndiaGold & SimplySAVE cardsRs. 100 on Rs. 1,000 Fuel spend
State Bank of IndiaGold Classic CardRs. 100 on Rs. 2,000 retail spend
State Bank of IndiaDefence cardRs. 100 on Rs. 750 spend in defence canteen
Kotak Mahindra BankDelight Platinum10% on dining, movies
Kotak Mahindra BankCorporate Wealth SignatureHigh cash back
HSBC BankVisa Platinum10% on all spends during the first 90 days from the date of card issuance

Although it seems very enticing to get money back for the spends you make, there are certain tricks played by the card issuers, which are overlooked by the applicant while applying for such cards. Here are some of the key points to make a note of when applying for cashback credit cards.

Before applying for cashback credit card check following details:

  • Is there any minimum spend required to avail cashback? Cashback is received only after spending certain amount of money. So check this before applying. It should not happen that, just to earn cashback, you spend money on buying unwanted things. Card issuers are at an advantage when they let you spend more. They earn interest if the user is unable to make full repayment before the due date.
  • When should the amount spent? – Certain cards require cards to be used during a specific duration only. E.g. in the first 30 days of card issuance. So check this out first.
  • Where should the cards be used: For e.g. on movie or dining cashback, is there any criteria on which movie theatre or hotel, card should be used. Many times, user is required to use the card at expensive places only. Or if shopping clothes, is there any criteria on which brand’s merchandise you get paid back.
  • Maximum cashback limit: It doesn’t make sense to opt for a card just for the sake of getting a cash back, if there is a cap on the cashback amount.
  • What is the maximum cashback per billing cycle: This is very important point to check. Many a times, there is a cap on the money you will receive back in each billing cycle.
  • What is the claim process, if cash back is not credited: If there is no cashback received, there should be a hassle free claim process.
  • When is the cashback credited back to the card account

How to make best out of cashback credit cards:

  • Typically user gets a fixed percentage/amount of cashback. So look for the one offering highest percentage of cashback.
  • Use it wherever possible, so that you get maximum cashback. For e.g day to day grocery shopping, online purchases, etc. For this, you need to be aware of the amount and where to spend.
  • Choose a card with no annual or joining fee to save money.
  • Look for cards where there is no condition on location, duration, or minimum amount to be spent for getting a cashback.

Eligibility Criteria:

Since cashback is one of the benefit offered, the eligibility criteria varies for each card issuer. Here are the common eligibility criteria requested by most of the banks:

  • Income
  • Credit Score
  • Documents: Pay slips, income tax return, bank statement, ID and address proof
  • Company you work for, in case applicant is doing a job.

Credit Card for Salaried Employees: Eligibility & Key Features to Consider

One of the key eligibility criteria for credit card approval is the income of the applicant. Although you can get supplementary card even when you are not earning, but if you wish to be a primary card holder then you should meet minimum income criteria set by the respective financial institution. In addition to this, there are other criteria as well, which are listed in the later part of this article.

What should salaried individual look for in a credit card:

Interest rate: This should be the first thing checked by a salaried person applying for the card. But if you think that you are honest to repay monthly bills on time and fully, then low/high interest rate should not bother you. In either case, always opt for a card with low interest. Because you never know, card repayments may get delayed because of financial uncertainties such as job loss, forgetting to pay the bill, and so on.

Reward Points and Cashbacks: Almost every card these days offer reward points when used for making purchases. But check where such cards are really accepted for redeeming the accumulated points. Typically card companies have tie-ups with select merchants (online/offline) only. And you cannot use the card at any other place to get reward points redeemed. So if merchants sell expensive items, then it may not make sense to get such card. If you are thinking of getting a card for regular use, then choose a one which offers reward points on grocery shopping.

Charges: Almost every bank charge processing fee which is fixed. Although this fee is small but still choose the one with no charge or low fee and save money.

Fees: Most of the banks charge joining and annual fee. And if card user spends certain amount in an year, then annual fee is waived off in the second year. Although this is tempting but at the same time, banks want users to spend as much as possible hoping that you will default and will pay interest.

Other eligibility requirements by the banks:

Credit Score: Once application is received, banks get your previous financial history from credit agency. And based on the details received, credit score is derived which is out of 900. If your score is above 750 then you stand a good chance to get the card approved.

Documents: In addition to the income mentioned, you will have to furnish the proof to validate your income. This includes monthly salary slip, income tax return, bank statement, offer letter of the employer, etc. This varies for each bank. Failure in producing these will result in application rejection.

Personal details: PAN card, Aadhaar card, residential address proof, etc.

These are the key criteria every individual applicant needs to have or furnish to the bank. Failure in submitting any of these, may result in application denial.

Here are few credit cards and minimum income required:

For monthly salary less than or equal to Rs. 10,000:

  • Vijaya Bank – Visa Classic and Visa Global
  • Syndicate Bank – Classic
  • Indian Bank – Bharat Card
  • Bank of India – India Card
  • Jammu and Kashmir Bank – Empowerment
  • Corporation Bank – Gold Card
  • Canara Bank – Visa Classic and MasterCard Standard

For monthly salary less than or equal to Rs. 20,000:

  • HDFC Bank – Freedom & Bharat Cashback
  • Bank of India – Visa Gold & Visa Gold International
  • Central Bank of India – MasterCard Titanium, Visa Gold, RuPay Platinum
  • Indian Bank – Gold, Classic
  • Syndicate Bank – Gold
  • Axis Bank – Gold
  • Andhra Bank – RuPay Platinum
  • Corporation Bank – Gold
  • Canara Bank – Gold

6 Ways to Reduce Credit Card Late Payment Fees

Having a credit card can be useful, as long as you are not in arrears. Every delay generates bank charges such as interest to pay on your unpaid expenses. For example, some banks charge late fees or charge high interest rates. So here are some tips to help you minimize the late payment of your credit card.

Contents :

  • How to choose your card
  • Use a single credit card
  • Know your repayment timeline
  • Pay back on time
  • Limit your expenses
  • Avoid withdrawals

1. How to choose your card

Late payment can generate significant additional costs. To minimize these costs, it is useful to look at the rate applied by banks regarding repayment and late payment and find the one that suits you best. In addition, bank charges may apply to different types of credit cards:

  • Conventional Credit Card: Make sure you pay back a portion of the amount you borrow each month. Your bank gives you a minimum monthly amount to pay and the payment deadline. Always pay on time to avoid late payment.
  • Prepaid Card: Your expenses are automatically debited from your account before the repayment due date. This means that, each month, your current account is reduced by the total expenses incurred. If your balance is insufficient, you pay interest based on the applicable APR.

Trick:

If you can’t pay your card balance this month, avoid making new purchases in the following month to reduce the costs of late payment. If you choose installment payments, try to reduce the number of repayments or even repay all your expenses at once. Be aware that by repaying the balance as soon as possible, you will pay less interest due to a potential late payment.

2. Use a single credit card

Another way to reduce your payment delays is to consolidate your balances from multiple credit cards into one card. So you don’t have to pay for the different cards, and you centralize all your expenses. It will be easier to follow up by consolidating your debts in one place. You can also better manage your late payments and pay off your card balance by paying one bill at the end of the month.

3. Know your repayment timeline

It is time by which borrower is required to fully repay the utilized credit. Make sure you know yours so you can repay your debts on time and avoid late payment.

4. Pay back on time

To avoid further payment delays, it is best not to exceed your credit card repayment deadline. You won’t have any additional expenses if you pay your bills on time. Learning to meet your payment deadlines will help you not lose too much money. Avoid unnecessary purchases to pay off your balance on time.

Trick:

  • If it is difficult to repay the entire balance, always try to pay more than the minimum balance mentioned by the bank.

5. Limit your expenses

Depending on the amount of your expense, it may be more advantageous to pay with your credit card or take out a loan. Because of the bank charges associated with repaying your monthly payments and possible late payment, you may prefer a loan for large expenses such as a car or renovating your home. Credit cards have a limited limit, so you won’t always be able to borrow as much as you want. In this case, they are to be preferred for day to day shopping purchases or others with a low cost. Typically, credit card rates are generally higher than personal loan rates.

You can also choose different payment methods. Prefer to draw a little from your savings rather than drawing it from your credit card.

6. Avoid withdrawals

With your credit card, it is also possible to withdraw cash at ATMs called as cash advance. As simple as it sounds, cash advances also have a cost. You will be subject to bank charges and interest related for using this service. To minimize your costs, think about spending only the money you have. If you do not repay them on time, your late payment may also cost you interest on the amount due.

By avoiding late payment, you save most of the time on unnecessary costs incurred. With these 6 tips, make sure you know the cost of your credit card. Read carefully all the conditions related to your card.

Is Your Credit Card Right One? 4 Signs That Tell, It’s Not

Good credit card management is, for many, the most important indicator for accessing bank loans on better terms in the future. Everyone who has had a relationship with a financial institution has used the plastic money, either for their first purchase of a cell phone or buying stuffs online or travelling because they offered incentives such as miles to travel or points to redeem for future purchases.

Over time, however, some bad habits create a damage to the credit history. There is a temptation to take advances with credit cards without paying attention to the fact that each bank charges a fee for this transaction and the current interest rates on this money are the highest for consumer credit and that if there is default, the moratorium rates are equally disastrous for any pocketbook.

You become parents

Parents who are new to their first baby don’t think much about all the changes that the new family member will bring. And they believe that life will continue as it was before and they will continue to go to those fancy restaurants, that they will find a way to keep traveling with the baby in their arms and they will continue to travel the world. That’s probably not the case and that’s why they should also check their credit card for a discount for their new needs.

Instead of that plastic to earn miles, choose the one that gives discounts on baby items or benefits on newborn clothes or milk jars and diapers. And if such cards are not available, look for a card specially made for shopping. Although, looking for discounts on diapers/shopping cards, will be less sexy than saving for that trip, but you will see that it will serve your finances better.

Your card is stretched over the limit

The misuse of credit is very costly. Over crossing the credit limit carries a very high interest rates which ends up affecting your credit history. If you are hung up on the installments you have the option to refinance with the bank, although this may generate new interest and lengthen the repayment of the debt. If you become delinquent the next month, your credit history may be affected.

Another option is to ask for an increase in the limit. But if you’re already hung up on the one you have and you’re lousy at managing your finances, you’re likely to be tempted to make a new advance to open up one more hole in your pocket, without having covered up the old one. Or finally, sell the debt to another bank. There are many entities offering card balance transfer at lower rates. But as long as you improve your situation, hand over the cards and end up paying off that debt.

Your credit card is from a private company

There are many private credit cards i.e. usually an agreement between banks and large supermarkets/others. The discounts or offers are specific to those companies only.

The problem is that if you accumulate points on one side, they may not work for you in another shop, and that’s a bit of a disincentive for the buyer. So before opting for such a card, check the policy carefully so that there are no surprises with your use of your plastic money.

No longer meets your financial objective

Credit card is not a’souvenir’, nor a reminder of anything. It is a means of payment and that’s it. See if the bank offers you a product that has a more favorable interest rate for your financial situation. There is no point in sticking to a card that may be obsolete and that does not even bring the minimum security to your finances.

What to do if credit card is lost or stolen abroad?

You are on holiday abroad and you have just been the victim of a theft or you have just lost your credit card card? What are the formalities to be completed to protect you from possible abuse?

Let’s understand this in detail below:

Risks related to the theft or loss of bank cards abroad

When on holiday abroad, be even more alert than at home. Because in the event of theft or loss of your bank card the procedure to report will be more complicated in foreign country.

There is a good chance that someone with bad intentions may have stolen your card for fraudulent use. Although fraudsters cannot withdraw money without your PIN code at ATMs in Europe or abroad, they can make payments on your behalf, especially online payments on sites that do not bear the words “Verified by Visa”, “MasterCard Secure Code” or “SafeKey”.

Moreover, in some countries outside Europe, it is still not necessary to put your PIN code to make payments in shops, restaurants, etc.. This increases the risk of fraudulent use of your lost or stolen card.

What is the procedure to follow in case of lost or stolen bank card abroad?

When you notice your credit card has been lost or stolen, you must act quickly. You must, in order:

  • Contact your bank to stop and block your card. It is also very important to keep the acknowledgement number provided by your bank, it will be required to prove your claim.
  • Report suspicious theft or loss of your credit card to the local police.

It is very important to take these steps as soon as possible in order to be able to be compensated for the money used without your knowledge. If you still have your card but it has been used without being physically presented (for example via the Internet), or if it has been copied, you will not have to pay a small amount to the bank.

If you follow this procedure carefully, you will in the worst case lose a small amount of money. Your credit card provider is responsible for all fraudulent charges made after you report to stop your card. This is only true if you have not committed a deliberate negligent act, such as leaving your credit card in your car in plain view with your PIN code nearby.

By performing this procedure, your bank will reimburse you for fraudulent transactions between the time your card is stolen and the time it is blocked. The small amount mentioned above can be waived if you have fraud insurance included in your credit card.

In addition, you can also ask your bank to replace your bank card. In general, replacement costs will be at your expense.

How can I protect myself against credit card theft or loss abroad?

To avoid becoming a victim of credit card theft or loss abroad, here are some simple tips to follow:

  • Keep your credit card in a safe place.
  • Be vigilant when withdrawing money: go with someone, avoid using ATMs at night, prefer withdrawing money inside banks, check the status of the ATM (extra cameras, keyboard status, etc.) and be attentive to the people around you when withdrawing money.

You now know the main formalities to complete in the event of theft or loss of a bank card. So be careful with your bank card when travelling abroad.

10 Misconceptions about Credit Cards

It’s time to stop misconceptions and think that credit cards were invented by the devil to put you into huge debt.

Some people are scared to death of credit cards. This is usually for 2 reasons:

  • When they know someone who has succumbed to debts because of them or
  • Someone who does not know how they work.

Some of these preconceived ideas are really absurd. Here are the most common misconceptions about credit card:

1. Credit Card = Debt

You will only be in debt if you don’t pay your credit on time. More emphasize on the word “on time”. Once the due date has passed, if you have unpaid balance, you will have to pay interest.

2. The interest is too high!

Again, they are high if you don’t pay your bills on time. When you make a purchase with your card, you get an interest-free period, called a “grace period”, which varies depending on your bank. Interest will be added to the payment of your credit after this period. This is something you want to avoid unless you want to have debt.

On the other hand, a deferred debit credit card is directly linked to your bank account and allows you a deferred payment of your purchases for a maximum of one month, without paying interest.

3. My friend/relative got into a lot of debt over credit cards

There are three reasons why people accumulate so much debt with their credit cards. They keep forgetting to make refunds. They’re over their card limit. They don’t keep track of their expenses.

If you are a responsible person and pay attention to your expenses, there is no reason to worry about having a credit card.

4. I’m gonna forget to pay off my credit

Banks would love card user to forget making repayment. But most banks have online banking systems that allow you to access your account with a single click and make payments on time. Too easy, isn’t it!

5. A debit card offers me the same benefits

Wrong. Credit cards offer you many benefits, such as miles, cashback, points, or insurance that you do not receive with a debit card. Finally, it will be impossible for you to plead lost money at your bank in the event of debit card fraud.

6. I don’t want to have an account with that bank just for the credit card

The good news is you don’t necessarily need it. In many cases, you can get a credit card with Bank A without opening an account with the same bank. In that case, you can pay your balance from your account with Bank B. So who says, it is complicated?

7. Credit cards have hidden fees

This is absolute rubbish. Credit cards have terms and conditions that you need to know to understand what you are signing up for. It’s like when you read Facebook’s terms and conditions when you create a new account.

8. Credit cards are not secure

First, when you are careful, you are very unlikely to be a victim of credit card fraud. But if this happens to you, the banks may block the transaction or even refund you. This is not possible with a debit card; what is lost will never be recovered.

9. A card like this is gonna make me spend more

It’s all about the state of mind. If you think you will spend a lot with your card, you can choose one with a smaller limit. For example: an amount less than your salary.

10. I don’t know which one to choose

There are many credit card comparison tools available online that allows you to compare between several cards very easily. You can also compare on websites of different financial institutions and find the financial product that suits you best.

7 Credit Card Tips to Use it Correctly

Credit cards are increasingly used to cover our daily purchases, practically all of us have at least one…but do you know the basic rules when it comes to obtaining a card of this type?

Here we give you 7 recommendations to choose the most suitable one and use it correctly.

1. Annual Fee

Is the amount the bank charges annually to lend you the money you have. It includes all the elements that are involved in serving the card user – processing, providing security, monthly alerts, etc..

The basic rule is – lower the fee, lower is the cost of the card.

2. Compare Your Paycheck Against Your Credit Limit

The Credit Limit is the maximum amount you can use to purchase and/or purchase services. This amount varies from person to person and card to card, and is granted according to a bank’s analysis of the history, work, salary of the person applying for the card, among others. Every time you make a purchase using the card, the money available on this line of credit decreases and when you pay down the principal or reduce the debt, you get the line of credit back.

It is recommend that you cap the limit to 60-70% of your monthly income and one more than 4 months of your salary.

3. Benefits

That’s right, everyone wants to live the goodness of the famous reward points. One of the factors that can tip the balance on one card or another is the benefits. These may include airline travel miles, special annuity pricing, sweepstakes, event tickets, pre-sales, points to purchase items and vacations, night sales, permanent discounts, sports benefits, partnerships, self-service, among others. It should be noted that while the benefits add to the attractiveness of the card, they may also involve a higher annual cost. Don’t get hooked on a card that offers you points redeemable for things you don’t use, be realistic. If you don’t travel often on the same airline, chances are you’re not going to do it for plastic either.

So don’t get hooked on a card that offers you points redeemable for things you don’t use.

4. No Interest Months

The Monthly Interest Free payment method allows you to purchase products and/or services at a similar price as if you were buying them in cash (paying the payment in a single amount), but with the possibility of deferring their cost within a certain period of time (6, 12, 18 months). This is much better than fixed payments (or credit scheme), because if you pay on time, it frees you from the monthly interest that the bank charges for the financing (interest rate).

However, keep in mind that if you don’t manage your expenses well, months without interest can upset your finances. It is recommended that you project the monthly payment of the purchase together with other financial commitments, to define if it is possible to cover all your expenses. It also suggested that you consider buying after the cut-off date to obtain up to 50 days of financing to start paying.

If you don’t manage your expenses well, months without interest can unbalance your finances.

5. Minimum Payment

When you use your credit card, you are using money borrowed from the bank. That’s why, month after month, the bank (the card issuer) sets a minimum amount you must pay to keep your credit current. If you don’t pay it, you will be charged interest on late payments and you will have a negative credit history, which will lower your chances of getting any type of credit in the future. Paying this minimum amount keeps your credit active, but it’s also a strategy that will only get you deeper into debt. Why? By making full payment, you are avoiding not only your debt, but also the interest. But if you only pay the minimum balance, you have to pay interest on the remaining balance, that is, you are not reducing your debt but increasing it. So remember the following:

“If you pay only the minimum balance, you will go into maximum debt”

6. Prepare Your Account Statements

Credit cards have a cut-off date, which is the last day of the period charged per month. After this day, all purchases you make will go into the next monthly payment and so on. It is important that you have your statements in order because they contain information such as the minimum payment, the payment deadline, the non-interest bearing payment, the credit limit, interest and your balance (total amount you owe the bank), all of which will allow you to see how much you have spent, how much money you need to pay off your debts and whether it is healthy for your finances to continue using your card.

Know if it’s healthy for your finances to keep using your card.

7. Build Credit History

If you handle all your finances in cash, you’re not building a credit history and it will be harder to get a credit card or credit itself, which can help you cover big expenses like buying a house or car. The credit history will help you get more credit, it’s a way for the bank to prove that you’re responsible enough for paying off your debts. So the better your credit history is, the more credit you can receive. If you’re young and have never had credit, you can get cards against fixed deposit which will help in building your credit history.

A good credit history will help you get more credit.

7 Ways to Make Payment When You Don’t have Credit/Debit Card

Nowadays, more and more purchases are made on the Internet with credit card being the most commonly used payment option because of convenience, cashback, rewards points, etc. It is a simplest and fastest shopping experience that allows you to find and buy almost anything in a few clicks of mouse instead of travelling miles in search of a particular item. But while online shopping is becoming more common, card scams and theft have also increased. However the free credit an individual gets on using credit card makes it a preferred choice for making payment.

But buyers have become cautious while giving their credit card number. So to safeguard your money, there are alternate ways to pay on the internet without a credit card as follows:

1. Amazon Pay Balance

The world’s largest e-commerce site Amazon has launched a new method for making payments over the Internet that does not require users to use their credit card.

Simply credit your Amazon account by adding money. Deposits are limited per day, but for larger purchases, you only need to make a few deposits in advance. The payments are made faster and there is no need to enter OTP or bank’s login credentials. And moreover, if you return any product, refunds are credited back into your Amazon Pay Balance within 24 hours.

In either case, this system is very promising.

2. Pay by cheque or cash on delivery

People are still very attached to the small piece of financial paper. They can pay by cheque or cash on some merchant sites.

The order is then validated only once the check received at the physical address of the site. This requires a little more commitment to a safer operation.

3. Bank transfers

As for the use of the cheque, you can finalize your purchase on the internet by sending a bank transfer to the merchant site. To do so, connect to your bank interface or go to your bank. The transfer of funds is fast. Once the funds are received, your order is taken into account.

Bank transfers are ideal for relatively large amounts, as banks sometimes charge a fixed fee.

4. Virtual Bank Card

More and more banks now offer you a virtual bank card.

You then have a code generator linked to your bank and each code is for single use. You no longer need a credit card to register on the internet and thieves just have to be careful!

5. Gift Card

A perfect option to exchange real money for virtual money.

Gift cards are sold by merchants with varying monetary value and each card is associated with a unique number. So you can buy anything and pay via gift card by entering the unique code. And the card becomes invalid once the amount in the card becomes zero.

You can use several cards to make a purchase or keep what was not used for a later purchase.

 

6. Mobile Wallets

Many online sellers also accept payments made through third party mobile wallets. It is similar to Amazon Pay Balance i.e. you need to add funds to the wallet and while making payment, the sellers website allows you to redirect you to wallet site and money is debited from your wallet balance. No need of entering OTP etc.

7. PayPal

Finally, the PayPal payment system remains the most successful today across the world.

If you receive funds on the internet, you can use PayPal virtual wallet to buy without ever making the link with your bank. After creating an account on the site, you credit it with the desired amount through your bank account. The sum is available within 1 to 2 days. Then, each transaction is done without your credit card. The freedom is yours.