While credit cards are designed to pay for day-to-day purchases, some of these expenses might not be ideal to be piled up on credit card bills. The use of credit card in India is widely popular among individuals now. However, using it also comes with the responsibility of determining whether one is using it wisely or not to leave a positive impact on his/her credit profile.
The first and foremost key to using a credit card wisely is to avoid using it for anything you cannot pay for as per your current repayment capacity. SO, if you hold the best credit card for online shopping, you might tend to use it whenever you make an online purchase. Nevertheless, in such cases, you also need to avoid using the card where the merchant might charge an additional fee for credit card transactions. Such expenses must be kept at bay from a credit card to maximize its utility.
In essence, while usage and expenses do vary from one cardholder to another, there are certain not-to-undertake expenses that stand common for all credit card users.
5 Expenses you must avoid making through a credit card
Choosing the right credit card according to your funding needs, spending habits, and expenses is definitely essential. However, responsible usage of the card brings a lot more than just this. Here is thus a list of five expenses that you should avoid when making the use of a credit card in India:
- Medical bills
Medical bills are not always consistent. It might be unforeseen as well. However, considering your credit card as a quick fix for it may not be right as it might end up costing you more than optimally eventually. As medical bills usually remain hefty, paying them increases the chances of one ending up defaulting on bill payment due to increased liability, thus accruing interest, while also limiting his/her credit availability.
- Tax payments
You can always pay your tax liabilities using your credit card. However, it is not an ideal way of doing so. If you pay your taxes through bank account transfer, you will not need to bear any sort of processing fee. However, in the case of tax payment through a credit card, you will have to incur a fee along with such a payment.
- Unsecured online purchases
Use of credit card in India or anywhere else should be avoided for shopping from websites which are unsecured. While it does not impact your financial liabilities, the risks of data compromise remain high.
For example, you must avoid shopping online from sites with a web address starting from ‘HTTP’ and not ‘HTTPS’. It applies to your spending irrespective of whether you own the best credit card for online shopping or not.
- Purchase of a new vehicle
While the credit limit of these cards can go high as per your income and repayment capacity, using your credit card to pay the price of a new bike or any other vehicle is not usually ideal. While it might seem convenient, such high-value payments block your credit availability, restricting the credit card from use even during emergencies. Further, such a big-ticket payment also increases your credit utilization, depicting an increased credit dependency.
- Discretionary purchases
Discretionary spending on credit cards must be avoided if you cannot pay off the dues via the credit card bill in full. Rather, it is wise to plan future purchases before going for them. It would save you from having to accumulate a high amount on your monthly bill unnecessarily, interfering with the timely payment of the dues. Note that paying the bill in full is always a smart way the use credit cards in India.
Keeping all the above points in mind will also help you to improve your CIBIL score through a credit card. It would further help you save significantly on interest outgo and assist in smart spending.
Plus, when looking for a multi-purpose and multi-benefit credit card, you can opt for the Bajaj Finserv RBL Bank SuperCard. The card’s variants come with numerous features, which can address your emergency funding needs as well as be a reliable financial resource throughout.
Also, one of the best features that the card’s issuer provides to customers is the pre-approved offer. These offers are available on financial products like personal loans and business loans and are enable hassle-free processing. You can check your pre-approved offer only with your contact details.
The use of credit cards in India is sure to bring you plenty of rewards and benefits. However, if you end up paying high interest on credit card bills, the benefits so obtained are countered. It is thus essential to consider and plan your spending when using credit cards to maximize their benefits also you can use your reward points time for any other purchases.