Credit Card Tips: Use your CC wisely.

Hello everyone,

Here are some suggestions to intercept CC misuse.

Suggestion 1: Register for SMS Alerts
I too have an ICICI Credit Card and I have setup SMS alerts for all transactions above Rs. 1000/- (you can set a lower limit also). Whenever any higher values transaction happens, I get an aleart on my cell.

You can do this by logging to their website or call the call center and ask them to set this up for you.

Suggest that you do this now - not just for ICICI Credit Card but for any credit card.

Suggestion 2: Lower your credit limit
Banks give you a credit limit on a credit card. Based on your financial history they may increase it also. It is not impossible to reach a spend limit of Rs. 5 lakhs. But do you really need so much credit? And if you do, will you be able to pay in full on the due date or afford the ruinous interest rates later?

For instance, will you carry Rs. 50K in cash with you? With high dominion notes, 50k will be just 50 notes of Rs.1000/-. If you will generally do not carry more than Rs. 1000/- in cash then why carry a 4-5 lakh CC? While I am not suggesting to reduce the credit limit drastically, talk to the bank and ask them to reduce it to something that will always meet your credit requirements. I have reduced my CC limit from 3.5 lakhs to 1 lakh.

Suggestion 3: Get rid of extra credit cards
Two credit cards are more than enough. Why carry unrequired credit cards?

Suggestion 4: Cover the CVV code
The CVV code is a three/four digit code printed on the back side of the CC. This is required for online transactions. Paste an opaque sticker on this code. So if your CC is handed to the waiter at a restaurant, the CVV code cannot be noted down. Inspect the CC after it is returned back to you.

Members can post more security measures.

Ek aur suggestion:

Keep a record of the signed charge-slip and check the same on receiving your monthly statement.

There are several features of the credit card that can be used effectively to minimize the interest costs.

And all you need to do is be a little smart while swiping. A few simple precautions and a little understanding of the features will help you to use your card very effectively. That is, you can use the same pool of money for different purposes at the same time. Here are a few tricks that you can use

Here's the first one...

Billing Cycle

Every month, the bank sends the credit card statement 'as of' on a particular date which lists down the transactions, interest costs and other charges. The statement also includes parameters like total amount due and minimum amount due. It also states which period does this statement pertain to and what is the due date for making the payment.

In the banking parlance, this 'as of' date is known as 'Billing Cycle'. On an average, 20 to 22 days are offered as interest free period from the statement date and considering 5-7 days time for the statement to reach you, it effectively boils down to 15 days interest free period in which you can arrange for the funds to make the payment

So let us get a bit into ways which you can use to use the billing cycle process best.See the attached table.

Just by postponing the purchase for two days, you have got a whopping benefit of 31 days of interest free period (54-23)!!! It means if you are buying an expensive item, you could get double the days to arrange for funds by postponing the purchase for just 2/3 days...
Isn't this amazing to know and simple to use!?

Tommorow about Reward Points....

I copy/pasted some tips from the previous thread: http://www.indiabroadband.net/genera...cc-wisely.html

this is correct you need to keep track of all signed slips, i ceased my HDFC BANK credit card in Jan 2007 coz i found wrong charges on my account and that is for 2 times where bank simply refused to give me my money back and as i was very amature at that time i just closed my own card without putting any case again bank and paid 1500 rupees extra to get my card closed. My bill was showing 1800 rupees as fule charges which my mom pointed out and trust me my Enfield bike can not digest that much fuel in one day:sad:

Reward Points

The second feature is reward points and redemption - Many of us feel this to be the least important item, but if you are a regular credit card user & more than 90 per cent of your monthly expenses are charged to Credit Card, you better track these points - Of course to your benefit!!
Most of the banks offer reward points ranging anywhere from 1 to 5 for every Rs. 100 spent. This again depends upon the card, the cross-selling relationship of the bank, co-branding, the merchant establishment you are purchasing from etc.

Also, they allow you to redeem these reward points against the annual fees of your card, thereby making it 'free-to-use' for you...(This doesn't apply to ICICI & HDFC - There are no annual charges in case of former and no redemption is allowed in case of latter!!)

But don't be sad if you are not redeeming your reward points for annual fees, You can still use them to purchase items from a wide range offered by the rewards program - Ranging from collectibles to watches, from paintings to accessories, from charity to food and dining & entertainment ...

Tommorow about Reminders....

All's fine.... usage tips and tricks are excellent...

I've had the best and worst experiences with the cc issuers..

The only thing i suggest....
Let plastic money be plastic money !!!
Never ever sign on the stip at the back side of your cc

Can anyone tell me -
What exactly is the Intrest Rate of cc ?
For every Rs 10000 you spend what are u paying back ?
Multiple cards (Calculate the annual expense you do on each card apart from your purchase)

Originally Posted by lovelyMe

All's fine.... usage tips and tricks are excellent...

I've had the best and worst experiences with the cc issuers..

The only thing i suggest....
Let plastic money be plastic money !!!
Never ever sign on the stip at the back side of your cc

Can anyone tell me -
What exactly is the Intrest Rate of cc ?
For every Rs 10000 you spend what are u paying back ?
Multiple cards (Calculate the annual expense you do on each card apart from your purchase)

Are you talking abt the interest on late payment...

Let me explain how interest is charged. You probably know it already and then again perhaps you don't and never read the fine print.

• Every credit card statement has total due & minimum due. You must pay any amount from min due to the max (you can pay in excess also, in which case the amount is adjusted in the next statement).
• Interest is charged on the payment not made.
• Interest rates vary per bank but on an average, 2.5% pm (30% APR) is quite common.
• Interest is calculated on balance due from the due date till the date of next due date.
• In case you do not pay the min due then interest is calculated on the entire due amout and late charges are also levied.
• Late charges are compounded for interest in the next bill.
• Cash Advances are different. Cash advance is treated as a loan. For cash advance, interest is calculated from the day the cash advance was made.

Others can contribute.

Originally Posted by just4kix

Interest is charged on the payment not made.

• Interest rates vary per bank but on an average, 2.5% pm (30% APR) is quite common.
• Interest is calculated on balance due from the due date till the date of next due date.
• In case you do not pay the min due then interest is calculated on the entire due amout and late charges are also levied.

Intrest rate ???
I wud rather opt for the Over Draft facilities.....!!!

If I Pay the money back within the specified date will i have to pay the interest then too?? If yes How much??

Originally Posted by gurusam

If I Pay the money back within the specified date will i have to pay the interest then too?? If yes How much??

You wont be charged any interest if you pay your dues completely within the specified date....

Thanks rameshji...

Reminders!

Not so common feature is due- date reminder...Yes, its true - ABN Amro bank offers the facility of alert on the statement date, through SMS and E-Mail, to let you know what is the damage to your kitty and when is it hitting you!!
And ICICI bank is even a step further...They offer SMS & E-Mail alerts for 5 days prior to actual due date
Available credit limit (on utilizing up to 90% of limit or when only Rs.2000/- limit is available)
Payment receipt
And all these are totally free - Use it to the best of your advantage.

Tommorow about BT (Balance Transfer)

Balance Transfer (BT)

Another smart way is the use the balance transfer facility provided by many banks. Make a big transaction on your credit card get the reward points and redeem them for anything and while approaching due date, just transfer the o/s balance to your other card.
Points to note for BT
You should have adequate credit limit on the new card and the BT amt. should be within the max. limit allowed by the new card co.
There are certain one time charged levied by the new card co. for the BT facility
Certain banks provide interest free period even on BT!
Let's include all these in a hypothetical example to show you the exact monetary benefit...

See the attached screenshot.

Purchasing on 29th, instead of 26th, would give you a monetary saving of Rs. 966/- (calculated @8% p.a.) due to 30 additional interest free days
2900 Reward Points can be redeemed for any of purposes mentioned above
A BT with ABC will give you a net gain of Rs. 2,055/- (calculated @8% p.a. for 75 days for a max BT of Rs. 1,25,000 -less- Rs.500/- BT charge)
Just by knowing all these features and utilizing them to the optimum makes you richer by Rs. 2,521/- ! & you have a flat screen, plasma LCD TV as well!!! Not a bad deal, at all.
So next time you go out for shopping, do remember that all these little observations can make a huge difference in your payout.

You know, I have found the best way to not get into debt with a credit card is to not even use one. it can be so easy to spend money that you do not have.

I suppose they are good to have in case of emergencies, but I have never used one in my life.

Me too. I've never used it and have never intended to use it in future too.

Originally Posted by bubble

You know, I have found the best way to not get into debt with a credit card is to not even use one. it can be so easy to spend money that you do not have.

I suppose they are good to have in case of emergencies, but I have never used one in my life.

Originally Posted by pothi

Me too. I've never used it and have never intended to use it in future too.

There are some places/instances where CC is the only option - for example, on line air/rail bookings or online purchases.

You should not take a myopic view of the situation. Whereas it is true that you can get into a debt trap easily by a credit card, the better option is to exercise self control, know what you can afford and avoid impulsive purchases.

I find credit card most useful for all my petrol fill ups, restaurant bills and some occasional spending here and there.

CC is very useful in booking the railway tickets online...
One must know when & where to use the CC...
As Just4kix said....One must have self control...
I have been using CC for the past 3 years...Till now not faced any issues...
People who are not fully aware how to use the CC face issues...
Its a wondefull tool,given that you know all its trade & tricks....

Credit card companies are charging higher interest rate and are even slashing the credit limit of their customers.

You may need to read the fine print of your credit card bills. Driven by current liquidity crunch in the market, credit card companies are charging higher interest rate and are even slashing the credit limit of their customers.

In the last two months, major credit card companies like State Bank of India (SBI) and HDFC have increased the range of the slabs under which their interest rate varies. Every bank charges an interest rate within a specified band on the credit it provides to its customers.

With liquidity under pressure, several credit card companies are now changing these bands which will translate to higher interest rates.

The country’s biggest credit card issuer, SBI, has decided to increase the upper limit of the interest rate slab from 3.1% to 3.35% from this month. The company has also decided to increase the cash advance fee from next month.

Another credit card major HDFC increased its slab ceiling last month from 2.95% to 3.25%. Other card companies, which have not increased their interest rates recently, are said to be charging customers a higher rate within the current slabs or decreasing the credit limit offered.

Simply put, if your interest rate is within the slab of 3.0-3.5% on a monthly basis, and you’re being charged 3%, now you could be at the higher end of the band paying 3.5%, which means an annual interest rate of 42%. While SBI declined to comment on the development, a mail sent to HDFC elicited no response.

While most credit card companies are feeling the heat of liquidity crunch, they fear that a fresh round of increase in interest rates will further jeopardise their market share.

“Except SBI and HDFC, most credit card companies have already revised their interest rates at least twice within six months. Now, all of them will shy from increasing their interest rates again. However, in case of customers who’re paying on revolving credit basis and have missed their payments have been pushed to new slabs or in the existing slab, their rates have been increased. Also, the credit limit of many customers have been slashed” said a senior official of a credit card company.

While ICICI currently charges an interest rate within a slab of 1.5-3.75%, Citibank charges anything between 1.5 and 3.5%. Similarly, the current slab for Standard Chartered is between 2.49% and 3.40% per month. American Express vice-president (marketing) Amit Dutta said in their case, he doesn’t foresee any increase in rates or decrease in credit limit.