Smart spending strategies: Using credit cards for financial flexibility

A credit card can be a powerful tool for managing your finances, whether you're facing an emergency or indulging in a luxury. With features such as reward programs, periodic offers, interest-free period, lost card liability, and insurance coverage, a credit card not only enhances your spending power and savings but also offers financial security. When used judiciously, it can be an essential part of a smart financial strategy. With the right credit card, you can protect your savings and enhance your credit score.

Here are six smart spending strategies to maximise your credit card benefits:

Choose a card that aligns with your spending pattern

Selecting the right credit card is essential to maximising benefits. Different cards cater to different spending habits, offering rewards and perks tailored to specific categories such as travel, shopping, or dining. Assess your spending pattern and choose a card that aligns with your lifestyle. For example, if you prefer the millennial lifestyle, you can opt for IDFC FIRST Bank’s FIRST Millennia Credit Card that comes with exclusive reward programs on shopping and other expenses. You can earn up to 10X rewards and redeem them anytime for attractive discounts.

Similarly, if you are an avid traveller, you can choose the FIRST WOW! Credit Card that comes with zero forex markup fee for international transactions and credit shield protection for card theft and frauds to safeguard your transactions. By choosing your card as per your spending habits, you ensure that you are getting the most out of your credit card.

In addition to the wide range of credit cards the FIRST SWYP Credit Card provides a comprehensive suite of benefits. The benefits encompass exclusive discounts on feature partners all year long, fuel surcharge waivers, up to 25% discount on movie tickets, referral benefits, travel voucher worth Rs 2100, roadside assistance, railway lounge access, complimentary Lenskart gold membership, and reward points for EMI transactions and spendings.

Using your credit card responsibly is among the most important steps for maximising the benefits. This begins with budgeting regularly. Establishing a clear budget helps you monitor your spending and ensures that you do not exceed your financial means. By setting aside a portion of your income specifically for credit card payments, you can avoid the pitfalls of overspending and accumulating unnecessary debt. Responsible usage ensures that your credit card becomes a tool that offers financial flexibility.

Spend smartly by leveraging credit card rewards

Look for credit cards that offer valuable rewards. For instance, the IDFC FIRST Millennia Credit Card provides unlimited reward points that never expire. You can redeem these points instantly for purchases online and at select stores. Additionally, the card offers four complimentary railway lounge visits annually and a 1% fuel surcharge waiver at all fuel stations across India, up to Rs 200 per month. Choose a card that offers rewards aligned with your spending habits.

Automate your credit card bill payments

Late payments can lead to penalties and negatively impact your credit score. Automating your credit card bill payments is a simple yet effective way to avoid this. By setting up automatic payments, you ensure that your dues are cleared on time, every time. This not only saves you from the hassle of remembering due dates but also safeguards your financial health. Timely payments enhance your creditworthiness and keep you in good standing with your bank, which can lead to better offers and terms in the future.

IDFC FIRST Bank customers can use the Autopay feature on the IDFC FIRST Bank Mobile Banking App to set up automatic payments for credit card bills.

Set spending limits on your credit card

One of the smartest ways to control your credit card spending is by setting a personal spending limit. This spending cap ensures that you do not get carried away by the ease of swiping your card. IDFC FIRST Bank offers the option to set spending alerts, which can help you stay within your budget. By keeping your spending in check, you maintain financial discipline and reduce the risk of debt accumulation. This strategy also helps you keep track of your financial goals and ensures that your spending aligns with your long-term objectives.

Leverage the interest-free period

Most credit cards offer an interest-free period, usually ranging from 45 to 50 days, during which you can repay your dues without incurring any interest. This feature can be particularly beneficial for managing short-term cash flow needs. By timing your purchases to coincide with the start of the billing cycle, you can maximise the interest-free period and enjoy close to two months of credit without any additional cost.

Pay your credit card balances in full

To truly benefit from the financial flexibility offered by credit cards, it is important to pay your balances in full each month. Carrying a balance from month to month incurs interest charges, which can reduce any rewards or benefits you earn in terms of additional payments. Paying off your balances in full helps you avoid these charges, maintain a healthy credit score, and keep your finances on track.

How to choose the right credit card?

• Compare credit cards using an online calculator

Evaluate different credit cards by comparing their features and rewards. Online credit card repayment calculators can help you make an informed choice.

• Check the relevance of the credit card’s benefits

Ensure the credit card's benefits are relevant to your spending habits before signing up.

• Assess the accessibility of the credit card

Review the accessibility features provided by the bank. IDFC FIRST Bank customers, for example, can manage their credit cards and access customer service directly through the IDFC FIRST Bank mobile banking app, available 24/7.

Conclusion

To make the most of your credit card, adopt smart spending habits such as budgeting effectively, leveraging rewards, automating payments, setting spending limits, and paying off balances in full. For a credit card that fits your needs, visit IDFC FIRST Bank’s website today.