Owing to the steady shift towards a digitalized economy, India is currently one of the largest credit card user bases with more than 47 million users in 2019.
This market is anticipated to escalate at a CAGR of 25%+ during 2020-2025. Much of this can be attributed to the growing tendencies to purchase first, and pay later.
In an attempt to personalize this financial product, credit card companies have brought in multiple variants that cater to the customized spending habits of individuals.
Such variants include shopping cards, fuel cards, travel credit cards, etc. The increased popularity of e-commerce platforms and online shopping has brought in the need to use credit card for shopping that comes with numerous financial leverages.
It includes earning reward points, a welcome bonus that can be later redeemed against vouchers, discounts, cashback, etc. at the partner outlets.
However, considering that shopping credit cards offer cardholders with access to substantial funding, individuals need to refrain from making the wrong financial decisions.
Here are a few of the essential tips that card owners need to adapt or adhere by to make the best of a credit card for online shopping –
Tip 1: Choose the right card
Considering that you have decided to use a credit card for shopping, make sure to track down your spending habits and patterns first. Next, avail a card that caters to your financial requirements. It ensures that they get to avail of the most vital reward points or bonuses with transactions on their preferred e-commerce platform.
Tip 2: Make timely payment of your credit card bills
Timely payment of your bills is a must considering the interests that the outstanding amount could draw. Refer to select cards such as the Bajaj Finserv RBL Bank SuperCard which comes with an interest-free period of up to 50 days on the credit utilised.
Considering that you strategize your expenditures, and purchase big-ticket expenses towards the start of the billing cycle, you are well covered with ample of time for payment.
Such companies also provide its existing borrower’s pre-approved offers that ease the application process to avail of financial assistance.
These offers are available on numerous financial products that include credit cards, business loans, personal advances, etc. You can take a look at your pre-approved offers by providing in a couple of details like your name and contact number.
Tip 3: Look for partner retail stores while shopping
Making an informed decision while choosing your credit card suggests that you have an in-depth idea about the partnered outlets, purchasing from where you can yield financial leverages in the form of reward points.
So, make sure to make a higher share of your purchases from the partnered retail stores and enjoy exclusive cashback, savings, milestone bonuses, etc.
Tip 4: Make the most out of your availed reward and welcome points
Transactions via credit cards ensure that you earn reward points. Nevertheless, it is essential to look into the details of redeeming your credit card reward points. A check into the fine print of the reward points ensures that you make the most out of it.
Tip 5: Make sure to earn reward points on each transaction
Use your credit card wisely to earn substantial reward points. All that you need to do is –
- Spend at partner retail stores.
- Check up on the details of the accumulated reward points.
- Redeem it before its last date.
Tip 6: Avail cashback on down payments and select purchases
Accumulating cashback may yield you with higher savings on your purchases. So, make sure to redeem your reward points into cashback on selected purchases and down payments.
Tip 7: Do not share your credit card details
With over 900 reported cases of fraud related to payment cards during 2018-19, the security of credit card remains a looming concern for potential and existing customers.
However, all that users need to do is to refrain from sharing any credit card details online or to any third-party individual without double-checking their authenticity.
Tip 8: Check up on your credit card statements frequently
Keep a check on your credit card statement for discrepancies and act at the earliest in case of any. Errors from the financial institution are not rare. Also, doing so may help you track down unauthorised transactions made on the card.
Tip 9: Make sure to keep the credit utilization ratio within 50%
Irrespective of your credit limit, you must refrain from a credit utilization ratio above 50%. I.e. try to not use more than 50% of the available credit limit on the card.
Maintaining such a percentage helps reflect a lower credit hunger of the user and increases their creditworthiness.
Considering that you are now well-versed with the beginner’s tip to use a credit card for shopping, avail one at the earliest. Remember to compare cards from different financers and settle for one that best caters to your financial spending patterns.