FINANCE TIP OF THE DAY
Can you afford your loan?!
Know the quantity of loan you can afford. The banks may sanction loan based on your income but you should look at your monthly expenditure and see if you can afford the maximum that banks offer. As a thumb rule, remember not to let your credit exceed 40% of your income!
Ways to Maximize the Advantages of Your Credit Card
Credit cards, or plastic money as they are popularly known, have become an indispensable tool not just in the metros, but also in rural areas of the country. With this fast-rising popularity, banks are introducing new credit card schemes or are aiming for co-branding, in order to offer better value and deals to the customer. With several credit cards competing in the market, issuers of new cards view existing users as their ideal target market, and users sign up for them in order to acquire a higher credit limit. Thus, they end up with multiple cards on their name. While there is no written rule prohibiting one from holding multiple cards, management and payment towards them can be quite a challenge. Opting for loans or a personal loan to repay the dues on your cards may be the only resort that you may need to seek in order to ease yourself from any such financial burden. But this is only going to land you into a gigantic financial mess. However, if you play your cards wisely, these cards can offer several benefits to you, enriching your experience. Some all-important tips are:
Retain relevant card details with you at all times, mainly the card number, name of the card holder, date and period of validity, besides important helpline numbers. Make backup copies and preserve them as they can prove useful when a card is lost or misplaced.
Opt for free credit cards as they will prove to be a good deal in the near future. Stay away from cards that charge an annual fee, for the simple reason that it may burn a hole in your pocket.
Set preference for the credit cards held by you depending on their acceptability, annual fees (if any), internet features and accessibility, besides other important features. Rank them in this order and the card that tops on all features should be set as first preference card, and so on.
Set a third preference card for online purposes. Often, investors can be wary of provide the card details online, for fear of hacking and unethical intrusions. However, this issue can be addressed by fixing a limit on the third card, thereby using it to cater to online transactions. Also, since PIN activation on credit cards can be an expensive affair, activate the code only for this card, and use it for emergency transactions.
Construct a plan to enjoy maximum utility with your cards. If you belong to the salaried class, then use your first preference card until you reach its limit. In this manner, you can keep a record of all your expenses in one statement of account, which will also lead to faster redemption of your reward points that belong to one account. If you have funds from different sources, then use your first preference card for half a month, and your second preference card for the rest of the month. In this way, you can avail maximum credit from your cards. Your third preference card can be used for emergency payments and contingencies.
Keep a track of offer schemes on your credit cards and avail them on a regular basis. While you should carry only your three preference cards with you at all times, in case you hold more credit cards, store them safely. Watch out for special discounts and offers on all your cards and do not miss out on opportunities that spell savings for you.
If you come across credit card products that offer better deals to you, then enroll yourself and redefine your preferred cards in order to enjoy maximum benefits and advantages from them.