Tips for credit card utilization


A Credit Card is one of the most convenient ways to pay by using it in a responsible way, you can enjoy interest-free money to use, rewards and freedom from cash. For using a credit card in a profitable manner, here are some tips.

  1. Know billing cycle of your credit card
    You can maximize your interest-free period if you are aware of the date of bill generation of your credit card. If you use your credit card just after your Credit Card bill is generated, you can get up to 45 interest-free days.
  2. Pay your bill on time
    Paying bills before date improves your credit score and other benefit such as increase in credit card limit offers on loans etc. Pay your balance in full each month to avoid paying interest and late fee.
  3. Never Maxed Out Your Credit Limit.
    Credit utilization(how much of your credit limit you are using) is the second biggest contributor to your credit score. So running up a huge credit card balance, and carrying it from month to month, can badly impact your credit score. Plus, it can set the foundation for getting into credit card debt(high interest rates)that can take a long time to pay off.
  4. Follow the rewards
    It is beneficial to understand the rewards program to maximize the reward points and cash back by using your credit card in the categories that earns the most rewards or stay updated about various types of offers. Redeem your reward points before they expired. Earning Reward Points can be beneficial in long run from movie vouchers, flight ticket discounts.
  5. Be smart about repayment
    Choose a convenient ways to pay such as EMIS , by choosing EMI you can repayment your large purchase in easy monthly instalments. You can pay your bill on your credit card provider’s net banking or use other apps that provides reward points on bill payments.
  6. Be vigilant about Credit Card use.
    Track your spending by monitoring your Credit Card transactions regularly. Keeping track of your spends will also ensure that unexpected transactions come to your notice and you can point them out to your bank immediately. You can set your limits on Credit Card in order to avoid any over spending.
  7. Use the Extra Perks
    Some credit cards offer other perks with cash back or travel rewards and Insurance. Rental car insurance; waived checked baggage fees; price protection(refund if an item’s price drops after you buy it); and extended warranty are just a few perks offered by many credit cards. If you don’t about the perks that come with your credit card, log in to your online account to review your credit card agreement or contact customer service.

What Is Insurance?

Insurance is a legal agreement (contract) between two parties i.e. the insurance company (insurer) and the individual (insured). Insurance is a way of protecting yourself and your family from a financial loss. It can be the death of the policyholder or damage/destruction of the property. The insured pays a premium in return for the promise made by the insurer

General insurance (Non life insurance) : general insurance provides insurance for valuables and products other than our life against damage, theft and loss of valuables which are insured.

Vehicle Insurance

Motor insurance : Under the Motor Vehicle Act 1988 it is mandatory that all vehicles (running on the Indian roads) Should be insured.
It is of two types
• Third party insurance
• Comprehensive insurance
Third party insurance : It also called Liability insurance. This is the minimum level of insurance required to drive a vehicle. Third-party insurance is essentially a form of liability insurance purchased by an insured (first-party) from an insurer (second party) for protection against the claims of another (third party). It protects you against any legal liability, accidental liability, or property damage in case of an unfortunate event. This policy also covers medical expenses in case a third party is injured in an accident or dies. Damage to your vehicle is not covered by third party insurance. Nor does it cover theft of your vehicle.
Comprehensive insurance:
It is optional not mandatory. Comprehensive insurance covers you for accidental damage caused by you or others. It can also cover claims arising from legal action brought against you following a road accident. Damage by theft or fire, vandalism, repair or replacement of windscreen cover (Damages caused by a natural disaster), and car stereo theft are also covered.

What is term insurance ?

Term insurance is a cheapest form of life insurance that provides financial coverage to the insured for a specific time period and no maturity claim. If you want to live peacefully without worrying about the future and financial stability of your family (in your absence), a term life plan is what you must buy. It is pure life insurance (not a mixture of insurance and
investment). Insured have to pay a premium for fixed term of his policy. IN case of unfortunate death of insured the sum assured will be paid to the family of insured however if insured survives the period of policy the risk cover ceases down. premiums are based on a person’s age, health, and life expectancy. Premiums paid towards a term insurance plan exempted from tax under section 80C. Sum assured is also tax-free under section 10(10D)

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