Big purchases are exciting, like getting a new gadget, upgrading your furniture or buying appliances to make life easier. Using a credit card for these can be super handy. You might also get benefits like cashback or reward points.
But it’s important to be careful. You need to spend wisely and keep your card details safe. Let’s go through some simple tips to help you use your credit card safely and smartly for big purchases.
Check your credit limit
Before you buy something big, check your credit card limit to make sure you don’t go over it. Every card has a spending limit, and if you cross it, you might face extra charges, or your payment could be declined.
Staying within your limit is also good for your credit score, as exceeding your available credit can hurt it. This helps you avoid spending more than you can pay back later. If your purchase is close to your limit, you can ask the bank to increase it temporarily or plan your spending carefully.
Consider interest rates
Credit cards come with interest rates that apply if you don’t pay your full balance by the due date. When making big purchases, it’s crucial to understand how much interest you might owe if you choose to pay in instalments. Some cards offer low-interest or zero-interest EMI plans for larger transactions, which can save you money.
Always compare the cost of financing through your credit card to other options, such as personal loans, to ensure you choose the most affordable method. Paying off your balance promptly is the best way to avoid high interest altogether.
Use virtual cards
Virtual credit cards are a safe way to shop online, especially for big purchases. They create a temporary card number linked to your account, so your real card details stay private.
This helps protect you from fraud since the virtual card can’t be reused after one transaction or after a short time. Using a virtual card is a good idea, especially when buying from new or international websites, as it keeps your information safe.
Manage credit card EMIs smartly
Credit cards let you turn big purchases into EMIs, where you pay smaller amounts every month instead of all at once. This makes it easier to manage your payments. Before choosing EMIs, check the details like interest rates and extra fees.
Pick a plan that fits your budget. While EMIs can help you manage your money, make sure they don’t strain your monthly budget. This is because missing a payment leads to extra charges. It can even hurt your credit score, so be sure you can stick to the plan.
Make the most of reward points
Credit cards give you reward points for every purchase. These big spends can help you earn more points quickly. Before buying something expensive, check if your card gives extra points or special offers for things like electronics. You can use these points for discounts, gift cards or cashback to save money.
Credit cards also have deals with certain stores, giving you extra discounts or cashback. Don’t forget to check the rules about redeeming points, as they can expire if not used in time. Using your reward points wisely is an easy way to save more.
Read your credit statement regularly
Your credit card statement is more than just a bill; it’s a detailed record of your spending. Review it carefully each month, especially after making big purchases, to ensure all transactions are accurate. Look out for any unauthorised charges or billing errors and report them immediately to your bank.
Regularly checking your statement also helps you track your spending habits, manage your budget and spot areas where you can cut back. Additionally, reviewing your statement ensures you stay aware of your payment due date, avoid late fees and maintain a healthy credit score.
Take advantage of your Kotak811 Credit Cards
To wrap up, using your Kotak811 Credit Card is easy and rewarding when you manage it well. Kotak 811 mobile banking app helps you do everything in one place - check your spending, track your credit limit, set up EMIs and redeem rewards. It keeps your payments on time and your transactions secure. With the app, you can stay in control of your card and get the most out of its benefits. Thus, managing your credit card becomes simple and stress-free.
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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
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