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Good Financial Discipline with Credit Cards- Interesting / Unknown / Small Steps- Helpful for Newbies as well

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Zacobite

Zacobite

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How about listing out some good financial discipline actions or share stories of misses where we learnt some lessons due to misuse of CCs.. May help many in this euphoria of only gaining points...Can be a running thread.. Even if one suggestion helps someone.. its worth it!!.. Keep it going..
 
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Zacobite said:
How about listing out some good financial discipline actions or share stories of misses where we learnt some lessons due to misuse of CCs.. May help many in this euphoria of only gaining points...
Click to expand...

One of the most lesson is that only spend as much amount which you believe you can repay in full by next payment due date.
If you think you can only make partial payment or have to convert transactions to EMIs, then don't do any transaction in the first place!.

A higher credit limit on card gives people a false sense of feeling that they have that much disposable amount in their hands, akin to bank balance, therefore it often tempts some people to spend more 😆. Beware of this trap!
 
Zacobite said:
How about listing out some good financial discipline actions or share stories of misses where we learnt some lessons due to misuse of CCs.. May help many in this euphoria of only gaining points...
Click to expand...
To add,

Check statement for all transactions in detail

Pay all bills ideally on 1 day of the month ( ideally salary day) - it may lead to some notional loss of savings bank Interest.. but all bills get paid irrespective of due date.. Helps me a lot

Set spend limit on all cards, disable international and ATM transactions
 
i have heard people recommend paying in full before bill generation date to improve credit score instead of on due date to show lower credit utilization.. for month 1 it will be in advance.. but then it will be a rolling affair
 
Zacobite said:
i have heard people recommend paying in full before bill generation date to improve credit score instead of on due date to show lower credit utilization.. for month 1 it will be in advance.. but then it will be a rolling affair
Click to expand...
Don’t pay bills before due date , try to utilise the entire credit cycle and pay 2-3 days before .
Also banks don’t always report on billing date , so even if you pay ur outstanding before there is no guarantee that it is not reported to cibil.
Rather try to keep the credit utilisation ratio to less than 30% across your total credit exposure and not individually
 
I have set the billing date of all of my 8 cards on the 28th to the 2nd of every month and I ideally pay the bill on the 10th of every month. I will set it on the 1st or 2nd which is on the 28th after the time when I can change the date to the billing cycle. And use less than 30% of the total limit. Don't go for EMI unless it's too urgent. Don't pay the Minimum bill. one more thing I use is if any of my card usages is more than 30% of that card limit I pay the remaining amount to make it less than 30%. So that the report goes to cibil for that card is less than 30%. My overall usage nowadays is around 15% though. Use cred for payment as they keep you notified once the bill is generated and will keep giving sms and notification for paying. Never use a credit card for atm transactions. Though idfc only charges 199+ gst for atm withdrawal. Sill never uses this type of thing. Have 3/4 of cards that are best in each category if you are a normal user. And you you are a card collector then you can have multiple cards.
 
Since the days of my first credit card (now have more than 20 of them), I formed a habit of paying the entire outstanding of a card on the bill generation day itself. Some may argue that every bank gives at least 15 days to pay back and why someone shouldn't utilise this duration to the brim but I have seen many folks complaining on Twitter about Cred or Cheq not crediting their CC outstanding on time and having a delayed payment shown in their CIBIL due to this, paying bills in advance helps to avoid such mishaps and even if the transaction gets stuck due to some reason you will still have a lot of time left to repay it again.

A clean repayment history goes a long way to procure cards from banks like Standard Chartered and HSBC. I have seen many guys struggling to get cards from these banks and on contrary it has been a smooth sailing for me.
 
anirban.choudhury said:
Don’t pay bills before due date , try to utilise the entire credit cycle and pay 2-3 days before .
Also banks don’t always report on billing date , so even if you pay ur outstanding before there is no guarantee that it is not reported to cibil.
Rather try to keep the credit utilisation ratio to less than 30% across your total credit exposure and not individually
Click to expand...
Accept Limit enhancement when offered.. helps reduce utilization ratios if not used highly

Keep a lookout for additional charges / surcharge on spends to avoid extra charges.. many merchants will ask for extra to use CC.. You have to avoid..

Keep all cards active.. use for atleast a small amount and pay off immature once every few months.. eg.. buy a movie ticket ~ 1000 rs for 2 and immediately pay off via some app.. so cards remain in good standing.. especially whr u have many cards
 
Check
Zacobite said:
Accept Limit enhancement when offered.. helps reduce utilization ratios if not used highly

Keep a lookout for additional charges / surcharge on spends to avoid extra charges.. many merchants will ask for extra to use CC.. You have to avoid..

Keep all cards active.. use for atleast a small amount and pay off immature once every few months.. eg.. buy a movie ticket ~ 1000 rs for 2 and immediately pay off via some app.. so cards remain in good standing.. especially whr u have many cards
Click to expand...
Check Credit Report atleast once in 3 months for accuracy.. especially if you have any big loan plan ( home loan etc)
 
Zacobite said:
Check

Check Credit Report atleast once in 3 months for accuracy.. especially if you have any big loan plan ( home loan etc)
Click to expand...
Get an NOC for all cards that are closed with No dues mentioned and keep record / soft copy for any future use
 
Zacobite said:
Get an NOC for all cards that are closed with No dues mentioned and keep record / soft copy for any future use
Click to expand...
Always cross endorse all kyc docs with date and purpose being used for e. g for Hdfc credit card date.. etc.. to prevent misuse.. never give blank signed kyc docs

take documentary proof / email of LTF, FYF or any other fee / charge waiver / free etc.

Avoid agents for cards unless well known to you. - yes, this is my recommendation, some may not like it!!
 
Zacobite said:
Always cross endorse all kyc docs with date and purpose being used for e. g for Hdfc credit card date.. etc.. to prevent misuse.. never give blank signed kyc docs

take documentary proof / email of LTF, FYF or any other fee / charge waiver / free etc.

Avoid agents for cards unless well known to you. - yes, this is my recommendation, some may not like it!!
Click to expand...
Update nominee on all free insurance coverage via CC or bank account.. very important, many don't do this..
 
anirban.choudhury said:
Don’t pay bills before due date , try to utilise the entire credit cycle and pay 2-3 days before .
Also banks don’t always report on billing date , so even if you pay ur outstanding before there is no guarantee that it is not reported to cibil.
Rather try to keep the credit utilisation ratio to less than 30% across your total credit exposure and not individually
Click to expand...
yes.. like i said first time will be advance then its a rolling credit cycle so no impact... most banks report end of the month so can plan accordingly, i saw some. thread around that recently.
 
I don't know if this is discussed or not but Sumanta da has a seprate account for paying all credit card bills( most probably hdfc) so that you know exactly how much you are spending every month. It also keeps a mental check in balance subconsciously. I try to follow the same .
 
SunnyM said:
I don't know if this is discussed or not but Sumanta da has a seprate account for paying all credit card bills( most probably hdfc) so that you know exactly how much you are spending every month. It also keeps a mental check in balance subconsciously. I try to follow the same .
Click to expand...
Yes this is a good practice. I use different bank account for different purposes.
Hdfc for sallary
Sbi/IDBI for savings
Kotak for cc payment
Paytm for upi
 
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Zacobite said:
Fill out all CC forms on your own. Never leave blanks etx.. Read all conditions on the form...
Click to expand...
Never falsify any info on application, or try and misuse for small gains.. banks are getting smarter and integration of systems are getting intelligent, it will all come back in some form
 
Zacobite said:
How about listing out some good financial discipline actions or share stories of misses where we learnt some lessons due to misuse of CCs.. May help many in this euphoria of only gaining points...Can be a running thread.. Even if one suggestion helps someone.. its worth it!!.. Keep it going..
Click to expand...
Any updates? In this world of hacks.. any good new practices? 🙂
 
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