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Deep Acclaimed Guide 2 Credit Cards for Dummies

  • Post category:Strategies / Finance
  • Reading time:16 mins read
  • Post last modified:August 15, 2021

Many people find credit cards complicated, and thus use them primarily for big purchases and then paying in equal monthly installments.

Some people avoid them because of the possibility of falling into a debt trap.

However, if  you get to know the Deep Acclaimed Guide 2 Credit Cards for Dummies.


You will not only improve your cash flow but will also establish a good credit history.

Getting your first credit card can be an exciting step towards building a good credit score and securing your expectations for a home or a study loan. 

If not, then it can lead to a mountain of debt as you would be struggling to repay for several years. We will go through some tips that you can consider before using your first credit card.

What is a Credit Card?

Credit cards are payment cards that charge against a credit line rather than the account holder’s cash deposits.

Each time a person uses a credit card to purchase something, a balance is accrued on their account that must be repaid each month.

Despite the potential for interest charges and late fees if the payments are not made on time, credit cards can help users to establish a good credit score.

Benefit from a zero-interest period

With proper planning, you can actually extend your interest-free period on your credit card to 48-52 days.

All you need to do is remember when your statement is generated, and then plan the bigger purchases to occur nearer to the beginning of your credit cycle.

For example, if your statement date is on the 8th of every month and the due date is on the 30th of every month.

Schedule your purchase around the 8th as the due date for this purchase will fall on 30th of next month giving you interest-free days of 52 days.

If you buy it towards the end of the cycle, for example on the 10th of the month, you will just get 20 days to pay the bill, as the due date will fall in the same month.

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How can I avoid credit card interest?

Whatever your credit card uses are, whether you buy an appliance, a Smart TV, or daily items, such as Phone Bills to a Burger.

The only way to avoid incurring interest monthly is to pay the outstanding balance by the due date.

Statements show the outstanding balance and due date each month.

Tracking how much you spend is the easy part.

To begin, you must determine how much you can afford to spend. Secondly, you should be diligent about tracking your purchases throughout the month, perhaps by using your credit card’s mobile app or website.

If you avoid forgetting to make the payment, consider setting up a reminder each month in your calendar.

The 50-30-20 rule can help you get your finances in order:

Make sure 50 percent of your income goes to necessary expenses, 30 percent to luxury items, and 20 percent to financial savings.

You can put your financial affairs in order by following a simple rule of thumb. In budgeting, this is known as the 50/30/20 rule. In general, the rules may be stated as follows: allocated income based on needs, luxuries, and objectives

Let’s take a closer look at it to gain a better understanding of how it operates.

  • Generally, a credit card user should devote 50% of their income to “needs” or essential expenses, 30% to “luxuries” or fancy spending like traveling, going to restaurants every weekend. and 20% to savings or plans like, study loans, home loans, etc.
  • Monthly Living Expenses

You should limit your essential expenditures to 50 percent of your monthly income. The expenses that are essential to your everyday living include loan EMIs, daily needs, commuting, child care, and the rest spend later without any concerns. 

The Discipline made will let you stay out of the debt trap which credit card companies are looking for.

  • Luxury foods, restaurants, unnecessary shopping, purchasing online if there are offers.

You can stay away from unnecessary expenses, such as partying out, online purchases for offers, vacations, and spending time in bars and restaurants. 

Make sure you don’t break the limit of 30% and go out of budgeting as per your salary. Check the total spending always after the fun.

In this case, the expenses are considered to be a part of the status existence spends. They can either be avoided or contained.

For example, instead of taking an expensive international vacation, you could try to go on a domestic vacation.

We as a family were thinking of going to Scotland, but due to the expenses, we were in a fix. So my friends gave me an option to go to Coorg, also known as the ‘Scotland of India’, due to its mountainous and regulative district in Karnataka, India.

Your budget will be more practical if you limit and manage your payments. It is no fluke that the expenses correlated with improving one’s status represent an extraordinary portion of one’s resources.

How to save and invest

If you save and invest 20% of your income, regardless of how you manage essential or non-essential expenses, you will not have to compromise on your financial goals.

These are simple suggestions or thumb rules. It is a great way to start planning your finances if this is your first time. By using these points, you will be fully able to identify likely problems in the future and repair them.

You will be more disciplined and be able to manage funds. Upon starting with them, you have the extensibility to modify them based on your events.

The normal high-income worker can save a lot more than a quarter of their income.

If you can, pay your complete bill

Your credit card company simply wants you to make the minimum payment, which is a percentage of your outstanding expenses.

It may seem easier and less expensive to pay only a portion of the amount due rather than the full amount, but it will cost you money in the long period.

If you pay only the minimum each month, interest will be added to your balance until you have paid in full. As part of your monthly payment will be applied to accrued interest, your balance will only decrease a little each month.

In summary? Avoid paying interest by paying off your balance each month. Instead, use the interest-free period benefits of credit cards.

Understand the fee structure of credit cards and how to stay away

In most cases, you can avoid credit card fees by overlooking certain behaviors, except the annual fee. To avoid a late fee, you can, for example, make your payments on time.

Get the Banking App

Keep track of your credit card account while on the go by using the mobile application of your credit card. 

You can access your account at any time to view your balance, check your credit limits, ensure your payment has been posted, report a lost or stolen credit card, and more.

While you can do much of this using your phone’s web browser, apps are generally designed for a faster, easier experience on mobile devices.

A known tip to increase your credit score is the 15/3 Credit Card Payment Trick

In addition to your bills and mortgage payments, breaking your credit card payments in half can help in boosting your credit score through what is known as the 15/3 hack. Practice it is as follows:

  1. Check your credit card statement for your due dates.
  2. You may then pay half of your balance fifteen calendar days after the due date.
  3. You should pay the remaining balance three days in advance of your statement due date.

As a result of using this method, the system counts two payments each month. Your credit score may increase as a result of those extra payments, even if it is not guaranteed. Try it out!

Creditors will offer you better interest rates if your credit score is higher.

If you have a home loan account, you may be able to set up a regular automatic payment from your account to pay off your credit card balance between statements.

Credit Card Benefits

Get discounts

If you carefully plan your spending, you can obtain discounts from three or four different sources on a single transaction.

In the event that you choose to pay through a mobile wallet, you may be eligible for discounts at the time of ordering food.

A well-planned transaction can result in savings of 30-35%.

Using reward points

Whenever you make a purchase, you earn reward points. These points expire if they are not redeemed. Check account how to use credit card to redeem your reward points.

They may be redeemed both online or by contacting customer service center.

Build Credit history (CIBIL score)


CIBIL scores can be used to determine credit history.

Some people require loans for the purpose of buying a home, getting married, purchasing a vehicle, etc., but the loans are not approved due to a lack of credit history. 

So apply for a credit card with security features, pay bills such as electricity, phone, gas, etc. every month instead of cash or other payment methods.

Your CIBIL score will be generated within a year.

A CIBIL score of 750 and higher is considered to be a high credit score. TransUnion CIBIL calculates a credit score between 300 and 900.

Loyalty miles

This perk predates the majority of others. Since early 1995, Jet Airways had offered consumers the opportunity to earn frequent flier points even when they aren’t traveling, thanks to a partnership with Citibank.

Now all domestic and international airlines offer credit cards through similar arrangements with major credit card companies.

Miles are generally earned at a rate of one mile per 100rs. Net purchases that are fee-free. It is dependent upon the type of airline ticket you purchase with your points or miles how valuable this reward is.

By offering an introductory bonus based on mileage, frequent flyer cards become immensely valuable.

Once you have satisfied the card’s initial spending requirement, you will often be 50% through 100% towards an award flight.

Safety Features

Payment by credit card reduces the risk of fraud. In the course of an investigation, it can take some time for the savings bank to reverse fraudulent transactions and return money to your account.

Also, you can put limits for various types of transactions, such as POS, International, ATM, Online transactions.
It is therefore advisable to use a credit card instead of a debit card, to prevent maximum fraud loss.


Several consumer protections are included with most credit cards that most people are not even aware they have, such as term insurance, travel insurance, car insurance, etc. that may extend beyond the manufacturer’s warranty.

Balance Transfer Offers

Consider obtaining a credit card with a balance transfer offer. If you transfer your balance from one card to another at a lower rate for a period of time (perhaps even 0% p.a.), it may provide you with some breathing space to reduce the debt.

Improve Your Credit Score

Increase your credit score by making multiple monthly payments

Dividing your monthly payment schedule into two installments is a great way to fix bad credit and boost your credit score:

Regular payments can reduce credit utilization.

Rocket Mortgage recommends that you maintain a debt-to-income ratio below 36 percent. You will be regarded as a more reliable borrower if you maintain as little debt as possible.

If your lender processes your payments twice each month, you can reduce your DebtToIncome throughout your billing cycle – confirm this with the bank as some lease loan servicers.

For example, only prepare your payments once per month except you are on a 2-month payment plan. If you have a good DTI, you will have more inclusive access to credit and a high credit score.

credits : flanagan
Pay your debts first.

You’ll be paying debt down faster if you pay your loans bimonthly. With a typical payment plan, you make 12 full payments each year on your mortgage, auto or credit card debt.

With 2 monthly payments, you’ll make 13 full payments each year — that’s one extra payment each year. By paying off your debt just a little faster, you can save money on interest.

Making regular payments helps in growing financial direction.

By paying your loans regularly, you will overcome debts faster. Repayment plans normally require that you make 12 full installments each year on your contract, car loan, or credit card debt.

If you pay the principal as early as possible, you will save money on interest by paying off your mortgage a little faster.

Get a good credit card

Companies issue credit cards based on the spending habits of their customers, and accordingly, discounts are offered.

best credit card in India

Credit cards for shopping, fuel, etc. If mostly for shopping, make sure you choose a credit card offering the highest shopping discounts.

Did you know?

Credit card companies are not always looking to get more money out of you.

But if you can ask or call them on the customer care or speak with their executives and ask for some offers or benefits as a loyal customer for so long.

Here are some points to look upon if your credit card company agrees, thus helping to improve your credit health.

Call the Credit card company for your loyalty

Raise your credit limit

By increasing your credit limits, you can reduce your credit utilization rate. 

You may request a credit limit increase if you have low credit limits as per the market standards on your credit cards from time to time as you earn more in the future.

If having a higher credit limit will lead to increased borrowing, this is not good for you.

Moreover, increasing your credit limit may result in a solid review of your financial stability and income, which may seriously affect your credit score.

Hence, you should carefully consider whether an increase is worth the risk of a solid review.

Cut your interest rate

The banks are generally more willing to work with loyal customers. Especially if you have a history of making on-time payments, it doesn’t hurt to politely request a lower interest rate if you have been with your bank a long time.

Though you should strive to make your monthly payments on time and in full, a lower interest rate can help reduce how much you will have to pay if you need to carry a balance at any time.

Ask to get rid of late fees

Your bank may waive a late fee if this is your first late payment. You may even find that some credit card companies, such as SBI cards, Hdfc, offer cards that instantly waive late fees on your first late payment.

You should not rely on them completely. Make sure that you pay your bill as soon as possible, and if you avoided a payment, contact the bank to explain your details.

Ask for a fee-free credit card

You may want to consider canceling your card if you wish to avoid the annual fee, but consider talking to the company.

First as closing your accounts can adversely influence your credit score. Banks may be ready to waive your annual fee, especially if this is your first account.

They may also offer statement credit or reward points to keep you as a customer.

Mistakes to Avoid

Never miss a payment

In order to avoid interest charges, make a habit of paying the full amount or at least the maximum amount you are capable of.

You are charged interest on your purchase from the very first day, which means that even if the bill is partially paid, interest will be charged on the first day as well. 

Having to pay only the minimum amount due on a credit card statement can be tempting, as you are not required to pay the full amount.

However, this is a trap to increase the amount of debt that you have, and gain the interest of 20-40% yearly, depending on the credit card company.

Cash withdrawals are bad

The use of your visa credit card for cash withdrawals is not recommended since there is no interest-free period for cash withdrawals.

You are charged an interest rate of up to 4 % every month.

Don’t exceed your usage limit

An over-limit occurs when the old transaction amounts are not fully paid. 

You should not use a credit card if you do not have enough money to make payments – and you should not max out your credit card.

To avoid interest charges, you should make a habit of making full payments or at least the maximum amount you are able to pay.

You should also be aware that most credit cards charge an over-limit fee, so if you fall behind on your payments, the interest will push you over your limit, and you will incur further fees.

Here’s what you need to know

If you wish to maximize your interest-free period, do not go on a shopping spree around the time of your statement.

Free credit periods are intended to benefit customers, but many of the time they become a debt trap for customers.

People tend to forget or not pay attention, and they default on payments. 

You should continue to make your payments on time if you have been doing so. Optimizing the free credit period is possible through planned purchases on your credit cards.

Additionally, if you own more than one credit card, you may align your purchases with their billing cycles in order to have a longer period in which to repay. Please be aware of the payment deadlines.


Using a credit card responsibly can help you save a lot of money. Switch as many of your purchases to advantages of credit card, and you won’t need your debit card for anything else.

You will never be required to pay interest on your debts if you play your cards right and pay your balances off each month.

If you could share Deep Acclaimed Guide 2 Credit Cards for Dummies on social media as public awareness is needed. Many young people fall into the trap as soon as they start earning money. Thank you.


Hi, My name is Sarang and this blog is managed only by me. Among my interests are technological aspects, finance-related, entertainment, hosting advice, etc. Despite my love for traveling, I always make arrangements to stay in a village or county to enjoy peace and nature. There are many info and tutorials available on this site, a WordPress resource focused on various topics.