Credit cards can be a boon or bane based on their usage. A credit card is a powerful financial tool if you know how to use it responsibly. And at the same time, it can turn out to be a dangerous beast in your life if you fail to use it carefully.

Many people still believe in the myth – If I have a credit card, I will build up my liability and ultimately damage my credit score.

However, the fact is - for a responsible individual, a credit card offers one of the easiest ways to build and establish credit history. All you have to do is manage your credit card spends efficiently so that you would be able to make the repayment of your credit card bills on time.

Here are ways to help you manage your credit card spends

Tip #1: Keep a check on your spending

Be very cautious about your spending habits. It is always better to keep track of all your credit card expenses so that you are aware of your balances, which will help you to stay away from huge debts. It is well known that credit card debts are the most expensive debts there are. So, by following this rule, you will be able to avoid overspending and have a control over your credit spends.

Additional Reading: How to Lower your Credit Card Utilisation

Tip #2: Pay your credit card bills before the due date

The best way to efficiently utilize your credit card and avoid high interest charges is to pay your credit card bills on time and in full every month. With a proper balance between your spending and control approach, you can avoid any kind of credit card debts

Tip #3: Maximise your credit card repayments

You may have multiple options to repay your credit card bills, like EMIs, mini loans, etc. Your focus should be on making as much repayment as possible. It is suggested that you pay your dues in full by the due date and not only the minimum amount, because if you on pay the minimum amount, your outstanding balance and every transaction henceforth will incur an interest, which could be even up to 40% per annum. If your payments are even less than the minimum monthly repayments, then not only will you end up paying high interest changes, you’ll also be required to pay penalty charges, which will lead you to more debts. Hence, plan to pay off the whole balance so that you can avoid getting stuck with accumulating interests on your card.

Tip #4: Keep you credit utilization below 30%

You credit card usage can impact your credit score in a big way. The primary factor in that is your credit utilization ratio. It is the ratio of your credit card spends to your credit limit. The more the ratio, the more credit hungry lenders will perceive you to be. The ideal credit utilization ratio is below 30%. You should be aiming to keep your utilization below this number, as using more credit will negatively impact your credit score which in turn can hurt your future credit approval chances.

Tip #5: Set a monthly credit limit

A credit card gives you the freedom to spend. Therefore, it is necessary you know your limit and restrain yourself from overspending. Overspending might cause you to struggle in repaying your credit card bills, which would lead you to a path of debt. So, set a low credit limit if needed to keep your spends in control, but make sure to always maintain the credit utilization below 30% as mentioned earlier.

Tip #6: Close your credit card properly

If you choose to move on to a new credit card or stop using your old credit card, go the right way about it. You can ask your bank on how to cancel your credit card account and be sure you closed it properly. If you don’t close your credit card account wisely and it falls under wrong hands, you could become a victim of fraudulent transactions, which can damage your financial life.

Additional Reading: Be mindful of these 9 points while using your credit card

Tip #7: Don't use your card to make random purchases

When you meet with a financial emergency or run out of cash for your day to day expenses you,may be tempted to swipe up your credit card. This may have helped you to overcome your cash crunch, but frequently using your credit card for unwanted random purchases will build up your debt. So, use your credit card wisely just as you were using cash.

Tip #8: Make use of your card reward points

Keep yourself updated about the offers and rewards associated with your credit card. You will be eligible for a host of discounts on products and services. Also, your card may have special privileges like free lounge access and priority services at airports that you can avail to experience financial wellness. Make sure you know all the details about your card so that you can make the most out of them before you pass its expiry date.

Tip #9: Check your monthly statement

Most of the people do not take this step seriously. They do not bother to crosscheck on the items mentioned in the credit card monthly statement. This happens mostly when you have an auto pay feature set on your account. By ignoring to do so, sometimes you could be vulnerable to fraud charges. If you come across any unknown charges, duplicate charges, or transactions that you did not make, you can contact and point them out to your credit card provider immediately. Always give a second look to your bills to avoid fraudulence.

Follow these tips to take charge of your credit card and keep yourself in better financial shape. If you don’t have one, check out the credit cards and the exclusive benefits you can get at CreditMantri.