The idea of owning a credit card is tempting. After all, you can buy expensive stuff that you don’t need to pay for in one go. Breaking down big amounts and paying with ease later is one big incentive. Another huge incentive in getting a credit card are the umpteen perks, rewards, and benefits they offer, based on the kind of card you buy. While all of the rewards sound exciting, here are a few things to keep in mind before you get yourself a credit card.
Do you need one?
Many users look at the rosy picture of owning things and forget that at the end of the month, they will eventually have to pay it back. While there are rewards linked with each purchase and transaction, make sure you don’t get lost in the circle and end up paying more than what the rewards are worth.
Are you capable of clearing off your balance on a monthly basis?
Paying off minimum amount makes you feel good at the moment, but know that the more you procrastinate paying off the entire balance, the more interest you are being charged. So while you’re getting dining rewards, travel rewards, and cash points, you are giving it all away in the form of interests and charges for late payment.
With rewards, comes fees.
There’s a gamut of reward cards out there with a variety of packages. But before going for the most attractive one with the most benefits, make sure you thoroughly know about all the fees and hidden charges. For eg: check if you are getting more in rewards annually than the annual fee you are paying.
Pay now, reap benefits later.
Rewards wont mean much if you gather debt on your credit card by each month. In the bid to get as much as you can out of your reward card, people tend to overspend. But it’s pointless as you can’t truly reap the benefits of your reward card until you clear it off.
So take care of getting caught up in the world of reward cards. Try and maintain your budget first, make sure your credit score remains strong, and clear all dues on time. If you are financially capable of owning a credit card, a rewards card is the best way to go!
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This content has been created in association with YONO SBI.