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HOW TO USE CREDIT CARD SMARTLY

HOW TO USE CREDIT CARD SMARTLY

1 PAY YOUR CREDIT CARD BILLS ON TIME

IF YOU PAY YOUR ENTIRE CREDIT CARD BILLS BEFORE DUE DATE, YOU DO NOT INCUR ANY INTEREST CHARGES.
BUT IF YOU FAILED TO PAY THE AMOUNT BEFORE THE DUE DATE, THEN YOU WILL BE PENALISED & CHARGED HEAVILY!!
ONLY SPEND ON CREDIT CARD, WHAT YOU THINK YOU CAN PAY LATER ON TIME.

2 DON’T SETTLE FOR MINIMUM PAYMENT
THERE IS A PROVISION TO PAY PARTIAL AMOUNT OF YOUR BILL, IF YOU CAN’T PAY FULL.
TO AVOID PENALTIES, YOU MUST PAY YOUR BILL ON TIME
BUT TO  AVOID HEAVY INTEREST RATES, YOU MUST ALSO PAY THE BILL IN FULL.
DON’T PAY ATTENTION TO THE MINIMUM DUES.

3 AVOID USING YOUR CARD AT THE ATM
CREDIT CARDS ALSO LET YOU WITHDRAW CASH FROM ATM’s
BUT AVOID USING THE FACILITY.
BECAUSE ATM WITHDRAWALS ATTRACT HEAVY CHARGES.

4 AVAIL A LOAN IF REQUIRED
WHEN YOU PAY BILLS ON TIME, YOU WILL HAVE A GOOD CREDIT HISTORY AND CIBIL SCORE.
BASED ON THE SCORE, BANKS DECIDE WHETHER TO APPROVE OR DISAPPROVE A LOAN.

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HOW CREDIT CARD WORKS

HOW CREDIT CARD WORKS
WHEN YOU SWIPE A DEBIT CARD, THE MONEY GETS DEDUCTED FROM YOUR BANK ACCOUNT.

CREDIT CARD LETS YOU BORROW FUNDS (USUALLY FROM BANKS) FOR A PRE – APPROVED LIMIT TO PAY FOR YOUR PURCHASES.

YOU ARE USING MONEY WHICH IS NOT YOURS BUT YOU WILL PAY LATER.

SUPPOSE YOU DO SHOPPING FROM 1STJULY TO 30TH JULY WITH YOUR CREDIT CARD.

DURING THIS PERIOD, ALL TRANSACTIONS DONE ON YOUR CREDIT CARD WILL SHOW UP IN YOUR MONTHLY CREDIT CARD STATEMENT.

SAY IT WILL SHOW ON 31ST JULY

THIS IS CALLED BILLING CYCLE.

TO PAY THE CREDIT CARD BILL, YOU GENERALLY GET A CREDIT FREE PERIOD OF 20 DAYS FROM THE BILL/STATEMENT ISSUE DATE.

THIS IS CALLED DUE DATE.

IN  OUR CASE, IT WILL BE AROUND 20THAUGUST.

IF YOU PAY YOUR ENTIRE CREDIT CARD OUTSTANDING BY THE PAYMENT DUE DATE, YOU DO NOT INCUR ANY INTEREST CHARGES OR PENALTY.

IN OUR EXAMPLE, IF YOU PAY THE CREDIT CARD BILL BEFORE 20TH AUGUST, THEN YOU WILL NOT BE INCURRED ANY CHARGES.

BUT IF YOU FAILED TO PAY THE AMOUNT BEFORE THE DUE DATE, THEN YOU WILL BE CHARGED HIGH INTEREST RATES THAT VARIES FROM 36% TO 42% ANNUALLY ON THE WHOLE 50 DAYS PERIOD.

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