The Art of Cash from Credit Cards: Tips and Tricks for Financial Gain

Nowadays, more and more people are avoiding cash transactions and are inclining more towards digital payments (thanks to UPI and Modi Ji’s cashless initiative). Carrying cash also has become inconvenient for some as people don’t have to wait in line to get change. Simply swiping their card or scanning and paying is easier.

It all looks good till the time you use these cards responsibly. The moment irresponsible usage begins, you see the ramifications. You might not realize how much you spend using credit cards. Most people do not keep track of their credit card balances daily, so they might not realize how much debt they are getting into. 

Credit cards are a great way to build good credit without paying extra interest. A good credit score can save you money later, like getting lower interest rates on loans for things like a house or a car, which is possible only if you use it responsibly.

The good news is that there are ways to use digital cash from credit card that feel more like using physical cash. There are tricks to help you keep track of your spending so you can enjoy the benefits of credit cards without getting into trouble.

Make Your Credit Card Your Monthly Budget Manager

People often debate whether using your credit cards for household expenses is a good idea. There are clear advantages to this approach. For instance, you can cover all your household needs with your credit card instead of cash and pay off the full amount each month. Not only do you enjoy a month-long interest-free credit, but you also earn reward and bonus points for using the card. 

You will find it convenient to have all your transactions in one place. You can use credit card management apps for added convenience if you have multiple credit cards. These apps give you every detail about your card, like Credit limit, Minimum due payments, rewards, and more.

Always Apply For a High Credit Limit

Credit limits vary for each person. Consider requesting the highest credit limit available when getting a new credit card. A higher credit limit lets you make larger credit transactions and enhances your credit score. Using a small portion of a high credit limit shows that you are not aggressively seeking credit, which can positively impact your credit history.

Remember, when you have a higher credit card limit, it is essential to understand what is the meaning of CVV. This three-digit code on the back of your card is really important. Keeping your card secure and never sharing your CVV is suggested, as it can lead to fraudulent activities.

Take Time to Understand Credit Card Rewards

Credit cards offer you reward points for specific types of spending. Some premium cards also include guaranteed gift vouchers and perks like free access to airport lounges, given at the time of joining or at regular intervals. Card users can exchange the collected points for rewards through cash or products. Use your card to maximize the rewards and benefits available to you.

As a credit card holder, you often receive messages and emails from your bank about the reward points you have earned. Keep in mind that these points have an expiration date. They become useless if you do not use them by a certain date. You have the option to redeem these points either online or at specific stores.

Read: Driving Towards Savings: Unlocking the Benefits of Fuel Credit Cards

Align Your Credit Card with Your Core Needs

Credit cards help fulfil a specific need, and you must use your card for that purpose. For instance, households often spend significantly on groceries and everyday essentials. Credit cards offer bonuses and discounts for these types of purchases. Another example is if you frequently drive long distances and spend much on fuel. 

Given the high fuel prices today, you would want to avoid paying an extra 2.5% transaction fee when you use cash from a credit card. In this scenario, choosing a co-branded petrol card that automatically reimburses those charges to your account is better.

Pay Your Dues On Time

Paying your bills on time is essential for improving your credit history and score. It also brings added advantages like special offers on personal loans, increased credit limits, and discount vouchers for purchases. These combined benefits can help enhance your credit score. Many credit cards offer the option to convert large purchases into EMIs (Equated Monthly Installments) to make them more manageable for your finances.

Conclusion

Now you understand how to use credit cards effectively to avoid cash transactions conveniently. Additionally, we shed some light on what is the meaning of CVV too. Credit cards are only suitable for some; even the most effective psychological strategies might not change that. You should never feel obligated to use a credit card. If you are uncomfortable with the idea, you can begin using a debit card to get accustomed to card payments and then transition to a credit card when you feel prepared.

Read: Leveraging Credit Card To Bank Account Transfers For Greater Control Over Your Finances