The Sly Credit Card

Isn’t it the best feeling when you’ve satisfied your craving to spend without having to spend a rupee?

Don’t we all secretly have this wish in our hypothetical list of wishes?

Let’s be honest, we all do.

That little card calls out to us asking to be swiped.

But hey, we are all scared of debt. And somewhere at the back of our mind that mail in our inbox with the card statement and due date does linger.

Then how do we ensure that our cravings are satisfied and we don’t fall into the trap of credit card debt.

Let me share with you how I use my credit card to do both of the above.

If you knew me well, you’d know how much I love shopping.

Off late I’ve become very mindful of spending money. (But, that’s a story for another day.)

So, do I pay for my expenses by cash or card?

Well, it depends. Uhmm, on two things, how much disposable cash I have in hand and how much money I have in my Savings account.

In case I have sufficient cash with me, then I prefer making my purchases with cash. Spending cash makes you really think if that expense is worth it because it pains to part with cash.

If I don’t have sufficient cash with me, how do I pay?

Well, I could pay using a debit card or a credit card.

Considering my preference for cash, I’m sure you’d assume that I would make the payment using a debit card.

But, no. I usually make payments with my Credit Card.

And here’s why I do that.

Paying with credit card, allows me the following benefits:

  1. I get credit for my expense. Which means I don’t have to pay for that expense upfront and get a credit period to clear my debt.
  2. I get points or miles, which when it adds up to a substantial figure I can redeem and make further purchases with.
  3. And not to forget the benefit of cashbacks and discounts that come along with the card.

The points do help you save a lot of money if your credit card is used wisely.

I have booked many free trips with those accumulated miles.

Isn’t that a win-win?

But there is a catch.

I use my card when I have sufficient balance in my account.

This means that even though I might not have paid upfront for the expenditure, I have ensured that I have sufficient balance in my account to make the payment on the due date.

Similarly, when I make an online purchase or payment, I always ensure that my account balance > minimum balance required + balance equivalent to my credit card bill which will be due at the end of my credit cycle.

It makes me very uncomfortable if I make a purchase on credit without having a substantial hold of that money either in cash or in my account.

In the worst-case situation, if I do have to take credit. I ensure that I will be getting the money sufficient to pay for that credit card bill that’s going to come crawling into my mailbox before the bill is due. Or else I evaluate the necessity of the expense a million times over before entering that 6 figure OTP.

And hey I believe by now you would have guessed that I always pay my credit card bill in full and on time each month.

You don’t want that horrifying interest to lead you into the credit card debt trap if you fail to pay in full. The joy of spending may turn into a nightmare. And you definitely don’t want to miss paying on time, because that terror of late payment fee is going to haunt you for days to come.

So, let’s use our Credit Cards wisely, satisfying the pleasure of not having to spend a rupee and yet not falling into the debt trap. And use the points wisely. Because who doesn’t love some free money.

How do you go about using your credit card?

Let me know in the comments below.

Until then, Ciao.

8 thoughts on “The Sly Credit Card

  1. Rishi Jain says:

    Very interesting read, in my opinion, a Credit Card should be used as a payment mode more than anything else. The benefits of spending through the card are a real sweetener these days. But ya, being a disciplined card user is the key. In fact a lot of times, if i make big ticket purchases on my credit card, I prepay my credit card so that i do not have a large outstanding on the card by the end of the month.Credit Card debts are worse with interest and late fee including you might be paying over 50% interest, isn’t that crazy?

    Liked by 1 person

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