Credit cards: How to use them?

Personally speaking credit cards is something I lived with for most part of my life. Till it became embarrassing not to have one. I needed it for travelling, ticketing on the net, etc. so I got one.

There are many ways how a person can use his credit card sensibly. As far as I can see it, the following makes sense. I have a friend who has almost a nil balance in his savings account. He uses his credit card extensively and on the due date issues a cheque – and the money flows from his Liquid Mutual fund. This I think is excellent but not my style. To me moving money from a LF to SB in time to pay bills is a lil too much of an effort.

I have 2 credit cards. One from I bank and the other from H bank. I bank thought it worthwhile to give me a limit of Rs. 47,000 and H bank thought it worthwhile to give me a limit of Rs. 5 L.

Largely i pay for my petrol, telephone, travel, hotel, grocery, vegetables, books etc. on my ‘I’ bank credit card. On the due date (actually 3 days before) it gets paid in full from my Savings bank account. Rarely have any purchases been made for a durable item like a music system. Of course I bank calls me regularly for converting it into an EMI – and that is amusing to say the least. This card is used really heavily for purchases of air tickets, rail tickets, E- buying of books,

The H bank credit card is used once in a while in a very secure atmosphere – to just keep it alive.

Why do I need the H bank credit card at all if I am not using it?

‘Cause it is a card that can be used in case of a medical emergencies. If a dependant is admitted in hospital (and hospitals are notorious for not admitting without payment) the easiest thing to do is to sign a blank slip and get the patient admitted. Next morning withdraw money from the bank and replace the blank charge slip…as simple as that.

So this is the way I use the credit card. I would be happy to see your comments on this whole issue of 3% p.m interest that credit card companies charge…

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2 Responses to “Credit cards: How to use them?”

  1. Having a credit card is a necessary evil – the stress being on evil. Like you had said it is necessary in case of emergencies and things you can pay only through credit card (online purchases and large ticket purchases). But the discipline – of paying it on time – cannot be maintained all the time. They charge a abnormal interest rate, late fees, etc. I would anyday go with the debit card and a paypal account for online buying. And there are credit cards which charge you annual fees…cannot believe the greediness!

  2. The best way of using a credit card is to pay all your utility bills & get a cash back of 1.5-2.0%. Pay the dues 3-5 days before the due date.

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