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How to Increase Your CIBIL Score While Using Credit Cards Effectively

Usage of more than 1 Credit Cards has grown among the people now-a-days. At the same time, CIBIL Score plummets on untimely payment of bills on used cards also rised. This warrants while somebody apply for a loan in need due to less Credit Score, however, this situation can be overcome by following a simple plan of action for which you have dual advantage while your Credit Score spikes Money can be saved. Learn how to do that..

Different Cards for Different Needs:

There are various types of Credit Cards available in the market now. People who travel frequently can choose the Travel Cards, the benefits might include best discounts on flight bookings and Hotel Rooms. People who transact more online can choose the best Cash Back Cards which offers the highest cash-back. Though you may get some cash each time while transacting with these cards, however a single card usage is not advisable for all types of transactions. You can use different cards for different purpose. Find out for which type of transactions you use Credit Card more after analysing your spending behavior, it is good to choose the type of Card suitable for those transactions. Such type of card usage is important while availing card credit.

Segregate The Cards:

Credit Card maintenance is bit difficult if you own multiple cards. Therefore, we need to apply the logic on better usage of card means Transacting on card is not only the criteria and your approach should also aim to no single paise excess payment other than the Outstanding Bill. Our usage plan should integrate with the Credit Period offered by the Credit Card Company in a logical way which is comfortable to us. To follow this we need to exercise a bit.
For example: Use a card to buy house hold groceries at the beginning of each month which has a credit period, if you want to do shopping online use the card which has the credit period ends with month end. Check the bill dates before you spend, remember one important thing, if the payment delays Credit Card Company’s will levy heavy penalty in terms of the interest on outstanding bill and even on new purchases also. When times, if you are unable to clear the Credit Card Bill Payments before the due date, you have an option to switch to the Balance Transfer of another Credit Card and pay the dues, with this you can save yourself from being paid the interest and penalty on outstanding bills, this also enables your Credit Score stands Positive.

Stick to 40% of the Card Limit:

Do you know, what is the Credit Limit on your Card? and What extent you are using your limits? such things directly or indirectly impacts on your Credit Score. If your spending is upto the brink means your Financial Discipline is in danger line. Hence, it is better to use upto 30% – 40% of your card limits. If you want to spike your Score up, use as much as low. Banks observes this behavior and in times you are given priority to extend any loan or credit to you easily and there is also a chance in score growth.

Do Not Neglect the Rewards / Reward Points:

Reward Points are issued to the account holders/credit card holders account by the Credit Card Companies who use the cards more frequently to promote their cards more. For instance, some cards offers reward points for every time you fill the fuel at petrol pumps. Some other cards gives offer on Restaurant Bills and Purchase on Cinema Tickets. The Reward Points may vary with the Cards. So choose your card as per your spending behavior. This certainly will help to build some sort of savings.