A credit card is like a swiss knife in the hands of a cardholder. One can purchase any goods and services under the credit limit of his credit card and then pay for it later. Credit cards come with an interest free period which usually varies between 50 and 55 days. A consumer can clear his/her dues without any interest on it within that stipulated period. The best credit card in India for a consumer would be the one which offers the longest interest free period to them. There are various credit cards with interest free period in India. However, a person who knows the optimum utilisation of the interest-free period can only make the most benefit out of it.
A cardholder must utilise the interest-free period at its most to churn out optimum benefits.
6 Tips to Utilise Interest Free Period
The smart tips mentioned below can help you learn the fullest utilisation of the interest-free period in credit cards:
Choose the purchase date smartly – The date of purchase while using a credit card must be chosen wisely. If one makes a purchase at the beginning of the billing cycle of his credit card, the charges of that purchase appear in the next month’s bill. For instance, if your card’s monthly billing cycle starts from the 7th of every month and the due date is calculated from 26th of every month, you should make a purchase on the 8th day of a month. So, if you make a purchase on 8th of July then your due date will fall on the 26th of August which will allow you to enjoy around 50 days of the interest-free period. Choosing the best credit card in India and utilising the interest-free period efficiently, will get you maximum benefits.
Keep juggling among multiple cards – If you have multiple credit cards, you should make purchases using those cards at the beginning of their respective billing dates. You should not use all the cards simultaneously. Plan your transactions according to the billing date of your credit cards. If you use each card on the next day of its respective billing date, you will get around 50 days of the interest-free period to clear the dues of each card. A person possessing the best credit card in India should also know this calculation to make the most of it.
Keep a track of payments – A few silly mistakes and negligence can cost dearly! In most of the cases, cardholders either forget the due date of their card or do not drop the payment check in advance. You should keep a record of your payments properly. Do not drop the payment check just a day or two before the due date because if the clearance of your check is delayed somehow, you will be liable to pay late charges and other penalties (if included). Your payment is not considered until the company’s account is credited. It is better to make an online payment to avoid such issues and track payments to know if it is successfully made or not.
Pay the outstandings in full – If you wish to utilise the interest-free period, you need to clear your total outstanding amount within the last due date. You will be charged late fine even if INR 100 if left due. Moreover, if your next billing date starts with an outstanding amount, you will not get any interest free period on your next transaction. Therefore, you should clear your total bill amount within the due date to enjoy the benefits of the interest-free period.
No Cash withdrawals – If you make any cash withdrawal from your credit card, you will not be entitled any interest-free period. Cash withdrawals do not hold the concept of the interest-free period. If you make a cash withdrawal, you will be charged interest on it from day one including cash withdrawal fee. Even the best credit card in India charges interest on cash withdrawals. So, one should avoid it completely.
No Partial Payments – If you make partial payments of your outstanding amount within the payment due date of your card, an amount of interest will be levied on your payment. If one wishes to utilise the interest-free period that is offered to them, he should always clear the total outstanding amount in one single payment.
Credit cards can be a very helpful source of instant funds if one knows the proper and best use of it. The interest-free period that credit card companies offer is a boon if the utilisation of the credit amount if it is known properly to the consumers. One should understand that a credit card can be a zero-cost source of funds if the used it in a disciplined and organised manner. Be aware of the terms and conditions of your credit card provider and use it wisely.