POSTED BY July 16, 2012 COMMENTS (123)ON
Do you want to know some credit card tips which you can use in your life ? In all probability you must be holding a ICICI, HDFC or SBI Credit Card and must be wondering how to use it effectively ! . Credit card is used by almost everyone now a days and utilizing a credit card features is an art -I would say. It needs discipline, attitude and the right mindset to be used. However I came across 2 very good credit card tips, which were discussed by few readers on the comments section and hence this article bring forth those tips and tricks to you. These following tips are really good, but only for those who want to really squeeze out the benefit of their credit cards and not for someone who likes to keep it simple. Let’s see those credit card tips:
Most people know that by the end of the month, they will get a credit card bill and they will have to pay a good amount of money towards it. Now imagine this situation – You will most probably have a good amount of money in your savings bank account which you know would be utilized towards paying off the credit card bill and you make sure that the money stays with your account. You don’t spend it or invest it anywhere because it already has a purpose and it also improves your credit score and report
Now the simple tip here is, that just see how much is your average credit card bill each month. It can be 10,000, 15,000 or 20,000 at times, but if you know that generally the maximum you get is around 20,000. Then instead of keeping that money in your bank account, you can just do a short term fixed deposits in that start of your billing period, so that instead of earning mere 4% in a saving bank account, it will earn some 7%. The idea is to create around 90 days of fixed deposit each month for your average credit card bill amount. So what will happen that from 3rd month, you will automatically get those FDs matured and you will have the money ready. I said 90 days so that the interest rates you get are better. I can see that my ICICI bank is giving 7% for 91 days deposit. If your bank provides good return in 30 days, better make 30 days deposits.
Important : Do this only if your bank provides the online facility of creating fixed deposits and you would like to get better interest for your money in short term along with eagerness to pay off your credit card debt in full every time. At time this can look like over optimization, but its up to you. Now if you like it, take it, else let it go. Thanks Suhas for this trick .
You can get the maximum credit of 55 days on a credit card if you make the purchase in the start of the billing cycle and have a grace period of 25 more days (30 + 25 = 55). But you can not always make big purchases in the start of the billing cycle to get maximum credit, a lot of people make this mistake because they do not understand minimum balance in credit cards . So in that case the tip is to have 2 credit cards with two different billing cycles preferably having a gap of 15 days between them, you can use one credit card for first 15 days of the month and another one in the second half. So for example you can have credit card A which has billing cycle from 1st Apr to 30th May and another credit card B whose billing cycle is from 15th May to 14th June.
So this way you can use the credit card A in the first half of the month and B in the second half. Note that though this involves 2 cards and requires a little tracking , but it will really help someone who uses the credit card a lot and would like to get benefit of maximum credit period almost all the time. Thanks Vareen for the tip.
What do you think about these credit card tips? Are they over kill!