Skip to main content

Manage multiple Credit Cards as great saving instrument

Keeping multiple credit cards can be a great saving instrument, if used wisely and timely

Young people thrive on credit cards. He has as many as seven credit cards of different banks and uses all of them very extensively. Apart from doing regular shopping, many pay for their electricity bill and all other sundry expenses using their cards. For all the cards they uses, he has not paid any interest on the credit availed of, thereby not allowing himself/herself to be harassed by banks for payment. And that’s why banks hate customers like them. Actually, credit card companies hate two types of customers — those who pay before due date of payments and those who don’t pay at all.


So how do they actually manage free credit every month to finance his purchases. There is surely no magic working for him. It’s just that he knows the art of managing multiple credit cards efficiently. What he does is simple. He meticulously makes a purchase a day after his statement is generated. For example, if his statement is generated on 20th of every month and the payment due date is on 11th of the next month, he will make sure that his next purchase is made on 21st. By doing this, he not only gets his next statement after a month, but also avails an additional 21 days to clear his dues. In all, it allows him to carry forward credit purchases for around 52 days.


And that’s not all. By having multiple credit cards, he is also able to transfer the balance due on other cards. In simple terms, the amount due on one credit card can be transferred onto your other card. But for this, you will have to pay a minimum amount due (5% mostly plus processing free) to the bank offering you balance transfer. This may not be a hefty price to pay, especially when you are short of cash and have to make heavy or expensive purchases such as jewellery or electronic goods on special occasions like weddings and others. Well, that’s not too heavy a price to pay to avail of a further interest-free period of three months!


So in all, if you do balance transfer, you can have interest-free credit for almost five months! In simple terms, due to different billing cycles, your purchases on cards can be planned better if you have multiple cards. Card-holders, however, should not get into the mode of paying 5% minimum amount due without realising that they are actually paying around 40-45% interest p.a. on rotation.


Although it is known that you must clear your dues by the payment due date to avail of interest-free credit, there could be times when you may fall into a debt trap. Do remember that in case you do not clear the amount due by the due date, you are charged interest on a daily basis for every day since your purchase. This whopping charge would reflect in the next statement and you would actually end up with no credit-free period — not even a single day. The annual interest rate is over 30% in most cards. Additionally, non-payment of minimum amount due (MAD ) by stipulated date also results in heavy penalties and charges being levied. And if you are the one who has a pay-cheque-to-pay-cheque existence, then you might as well have to pay for cheque bounce charges and late payment fee, which could further leave you poorer by several thousand bucks. As a way out for the people caught in the debt trap. Convert your credit card dues into a bank loan. By doing this you can repay your dues at 14 or 15% instead of paying 35-40% to credit card companies. He also observes that Indians are not used to using credit cards and they should not treat it as 'free money'. According to an official from Citibank dealing with credit cards who did not wish to be named, You could be headed for trouble if you have no idea about what your total debt adds up to, adding that consumers should not hesitate to call their creditors asking the due amount. This way they can have some control over their borrowing.


In fact, having multiple credit cards is a good idea only if you are ready to devote half-an-hour every week to keep a track of all your purchases. Other major advantage of having multiple credit cards is that if any of your card is not working, others may come in handy to save you the embarrassment and inconvenience.


Another good benefit of having multiple credit cards is that if you have to buy high value goods and the limit is almost full in one card, then the amount can be split in two cards. The other advantages on purchases made on credit cards such as cash-back on shopping and petrol purchases, all translate into savings.


In a nutshell, multiple credit cards can be a great saving instrument when used wisely. Otherwise they can land you in a soup.

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

What is Financial Freedom?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)     There were many things common between our Freedom fighters. All had the Single vision (Free India), common goal (independence) and had a disciplined and focused approach. They were ready to do anything and everything and had made so many sacrifices to see India free . But the road to freedom was not easy .They had faced lot many hardships, went to jail so many times and even confronted physical and mental torture from the British. There was one more thing which proved to be an advantage to our fighters that most of them were professional lawyers. The knowledge of legal issues and its impact on our country at large has helped them counter various bills and proposed new laws by the then government. It is due to their continuous effort that we are able to achieve the goal of Independent Indi...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now