Jun 30, 2007 02:25 PM
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Using credit cards to your advantage
You can use certain features of credit cards to your advantage. Let’s examine some of these.
Billing cycle and due date: You’ll find that your credit card statement mentions the statement date, that is the billing cycle, and a due date for the payment. Suppose the statement date is 16th April 2007 and the due date is 11th May 2007. Any purchase you made before 16th April will appear on this statement and you will need to pay the amount by 11th May, that is, within 25 days.
There is a way you can get more time to pay for a big purchase. Let’s suppose you made your purchase on 17th April instead of 16th April. The purchase would reflect in the next statement, that is, 16th May, and you will have until 11th June, which is almost 2 months, to pay off that bill.
Tip: If the due date on your card falls towards the end of the month and that’s when you have less cash, you could request the credit card company to shift your due date. They may consider the same.
Balance transfer: If you run up huge bills on all your cards and only manage to pay the minimum balance every month, don’t worry, there is still hope. Credit card companies will let you transfer the outstanding debts from your other cards to one or two cards at a lower rate of interest than you would normally pay on the outstanding balance. Not a good practise though – the reader needs to be warned here about the pitfalls on paying the minimum balance each month. However, before you take a decision, be sure to check the fine print. With some careful analysis, you should be able to pay off your debts and save on interest in the bargain.
Savings, discounts, reward points: Sometimes, credit card companies tie up with brands in retail, fuel, travel, holidays, entertainment, etc. to offer additional benefits to customers via co-branded cards. Co-branded cards allow you to save on regular spends such as grocery, shopping, fuel, etc. How much of a saving does it constitute when compared with direct purchase? In addition, you may be eligible for discounts and reward points on every purchase. Do these actually translate into benefits? Pls clarify However, don’t end up buying something you don’t need just for the reward points!
Alerts and reminders: Many credit card companies now offer e-mail and SMS alerts and reminders about payment due dates. If you can avail this facility, opt for it to avoid paying hefty late payment charges.
