I used to be one of those people who just swiped my credit card without giving it a second thought. I mean, who doesn't love shopping? But as I got older, I realized that my carefree spending habits were not only putting a dent in my bank account but also affecting my credit score. So, I decided to educate myself on how to use my credit card to my advantage.

Here's what I learned and I'm going to share with you.

1. Pay your bills on time: This one is a no-brainer. Late payments can have a negative impact on your credit score. So, make sure you pay your credit card bills on time. You can set up automatic payments so you never miss a payment.

2. Use your credit card for everyday expenses: Use your credit card for your regular expenses such as groceries, gas, and utility bills. This will show that you are using your credit card regularly and responsibly.

3. Keep your credit utilization low: This means that you shouldn't be using more than 30% of your credit limit. So, if you have a credit limit of  Rs10,000, you shouldn't be spending more than Rs 3,000.

4. Choose the right credit card: There are so many credit cards to choose from these days, and not all of them are created equal. Some offer cashback rewards, others offer travel rewards. Choose one that suits your lifestyle and spending habits.

5. Use it for emergency expenses: Sometimes, unexpected expenses come up and you don't have the cash to cover them. This is where your credit card can come in handy. But, make sure you pay off the emergency expense as soon as possible so you don't end up with a high interest rate.

6. Increase your credit limit: If you use your credit card responsibly and make all your payments on time, you can ask your credit card issuer to increase your credit limit. This will give you more buying power and also increase your credit score.

7. Keep your credit card for a long time: The length of your credit history is one of the factors that affects your credit score. So, the longer you have your credit card, the better it is for your credit score.

8. You can invest the monthly expenses that you are deferring using a credit card into a fixed deposit account for a certain period of time to earn a fixed interest. 

So, there you have it. By using your credit card wisely, you can not only increase your credit score but also have a working capital that can come in handy in times of need. Just make sure you use it responsibly and pay your bills on time. Happy shopping!

CA TOMY VEERATH & CA ALEX V JOHN

"Disclaimer: The information provided on this blog is for educational purposes only and is not intended as professional advice. We cannot be held responsible for any consequences that may arise from implementing the information without proper consultation. It is important to seek professional advice tailored to your specific circumstances before making any decisions or taking any action based on the content of this blog."