As I had said earlier I am trying to make this blog more rounded. I do not deal with financial Public Relations, credit cards, health insurance, home insurance, Technical Analysis, etc. So I am trying to get other experts to write. Here is an article on credit cards by an expert on credit – Aparna Ramchandra – her details are at the end of the article.

KYCC: KNOW YOUR CREDIT CARD

We all know what is a credit card and we think we know how to smartly use our credit card. Few think they know what a dangerous product it is and never have a credit card. They think they know how smart they are. The ones that are brave enough to opt for a credit card know that they have to pay the credit card bill on time and “all is well”.

In the last 10 years of dealing with clients who have no credit scores, low credit scores or poor credit profile I have made the following observations:

1. Early credit card users in India were not educated about how to use a credit card. Most used it, paid on time. The remaining few
2. a) tore up the card and trashed it and though it was the end of the story. They were never informed by the credit card guy who had shoved it down their throats that it had to be properly closed. Hence these guys got the rudest shock of their lives when years later they applied for a credit product and it got rejected. Plus they were told they had turned defaulters worth lakhs!!!! why because the card had an annual fee and that had compounded and ballooned to a neat sum:(
3. b) they paid the “minimum amount due” and believed they had conned the credit card fellow! the sordid story was the same as the first category guys.
4. c) these guys used the card never paid, moved on in life and then learnt that ‘karma is a b*%$.’ Your past comes back to haunt you.
5. Most were advised by the parents and elders not to use the credit card and they lost out an opportunity to build a robust credit profile so to speak.
6. Majority of the credit card users never ever ask what type of credit cards they can choose from and what are the benefits/features of a card?
7. Out of ignorance (read laziness) they say yes to the first card and lose out on the benefits.
8. And the list goes on

I would like to share a few tips on how to KNOW YOUR CREDIT CARD:-

1. Always ask for features and advantages of the credit card that is being offered to you. Choose what suits you rather than what the guy wants to sell.
2. If you are one of those rarely using types, then opt for a card with no fees.
3. If you are a frequent flier then say yes to the card that gives you lounge access, air miles etc
4. Swipe the card at the petrol pump where the petrol company gives you additional points because they have co branded with your credit card company.
5. Regularly claim your credit card points. You can buy vouchers to watch movies, grocery, air tickets and what have you!
6. Pay the credit card bills in full on time. But dont pay as soon as it is generated!

It may seem complicated but trust me its a matter of cultivating a habit. These are few ways in which you can make your credit card earn for you.

Say yes to credit card, but KNOW YOUR CREDIT CARD to be able to use it smartly.

Ms Aparna Ramachandra
Founder Director
(www.rectifycredit.com)
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