There are more than 36.24 million active credit card users in India, and the number of transactions using credit cards has grown by a record 9.4% in a 12 months’ period till January 2018. This huge growth is due to more and more millennials availing credit cards to better manage their finances.

A credit card offers features and benefits like redeemable reward points, discounts on shopping, air miles, EMI financing, etc. However, the attractive rewards and the ‘buy now pay later’ nature sometimes lead to bad financial management. That can quickly lead you to major debts.
Fortunately, you can take care of your credit card’s debts if you make some habits to manage your finances efficiently. Let’s take a look at 7 tips that will help you manage debts like an expert.

Create a monthly spending plan

You can separate your daily expenses, amenity bills, and monthly repayments by having a budget. This will help you sort out your finances and manage credit card debts professionally. Also, consider keeping a contingency fund if you face an emergency.

Always pay your dues in time

The best way to manage your credit card’s debt is to start paying your dues on time. You can also save money, as paying off the bill within the due date does not incur any interest.

Try to pay as much as possible above the minimum due amount, if you cannot clear the total outstanding amount.

Keep track of your billing cycle

Make sure you know your credit card’s billing cycle so that you can take advantage of the interest-free period. Billing cycle starts from the day when the bill is generated.
Suppose a financial institution generates bills on the 10th of every month. In that case, if you buy something on the 8th of that month, the amount reflects on the immediate bill and you get 20 days of interest-free period to pay it off.

On the other hand, if you buy something on the 12th of that month, the amount reflects on the next month’s bill. Now, you get up to 50 days’ time to clear the bill.
Plan your purchases smartly to utilise this grace period and manage your debts like a pro.

Track your spending to minimise your debt

Expense tracking is another important thing to remember when learning how to use a credit card or how to manage its debt. Monitor your regular and variable expenses; this shows you where you spend the most and help you build a budget accordingly.

Consider balance transfer

If you own more than one card, you can consider transferring the balance from the card with high interest rates to the one with a lower interest rate. This will save you money and also help manage your credit cards debts better.

There are many lenders in India who provide the facility of balance transfer. For example, RBL Super Platinum credit card which additionally comes with many industry-first features like interest-free cash withdrawals from ATMs, emergency personal loan, and many more benefits.

Remember to clear the debt with a higher interest rate first

Always pay the high interest debts first if you have dues on more than one credit card. You will reduce the total interest outgo because higher interest rates will accumulate into more debt in future.

Avoid owning multiple credit cards

Studies have shown that individuals who own multiple credit cards tend to spend a lot more than someone with only one or two cards. If you want to manage your debts smartly, you should not own more than 3 cards at the same time. Lenders will consider you less credit hungry.

You can save more, have a better CIBIL score, and prove yourself to be financially responsible once you start managing your debts efficiently. Follow these 7 easy tips to improve your financial habits in no time.

Author's Bio: 

Anuj Pandey is a financial advisor with an experience of more than 7 years.