How To Maximise Your Credit Card Spends

Using a credit card offers financial freedom that you have always wanted. One swipe of the card gets you brand new clothes, or pay a large bill at a swanky restaurant, or book a spa for yourself and your bestie. It is one of the best ways to spend money, especially since there are many rewards for swiping the card across a range of establishments, both in the UAE and abroad.

But in your search for a better lifestyle using a credit card, you might fall prey to overspending and some degree of financial irresponsibility. It is important to use the card correctly, wisely and only when necessary to gain the maximum traction out of its range of benefits. This article lists the ways in which you can maximise your credit card spends to get more value out of the card:

#1 Use the card regularly to avail its benefits.

The best credit cards in the UAE offer a spate of rewards and benefits in the form of free access to airport lounges and select experiences, gift vouchers, redeemable points for spending at member merchant outlets, etc. Pay attention to the range of rewards being offered and use them wisely. For instance, the Dubai duty free credit card offers 10% discounts at Dubai duty free outlets and raffle entries to world class events. Use this card every time you travel to make the most of these fine rewards. Or accumulate your points and redeem them for a flight ticket to another country.

#2 Lower your credit utilisation ratio.

Most people are unaware of the ‘credit utilisation ratio’ on their credit card. It is the ratio between the balance on your credit card and your credit limit. Ideally, your card balance should be less than 50% of the card limit. If you carry a high balance on one or more cards, it lowers your overall credit score. Most card users are unaware that carrying the balance from one month to another also increases the interest outgo on the card – this results in a bigger bill. The only answer is to lower the credit utilisation ratio as much as possible.

#3 Always pay more than the minimum amount due.

If you thought that paying the minimum amount due on your credit card was saving you money, you were wrong. You could pay the minimum amount and not have to worry about it, but the unpaid sum attracts interest. Soon, you fall into the habit of carrying over the unpaid amount from one month to the next, all the while settling only the minimum amount – this creates a big sum of unpaid money that is charged interest. Instead of continuing this practice, try and pay the entire outstanding amount, or at least 50% more than the minimum amount due.

#4 Use it only for big purchases if you tend to go overboard while spending.

Using a credit card is all about responsible spending and timely repayment. If you are less than careful, you can get into a groove where you use your credit card indiscriminately for every single purchase. Soon, you are astonished to receive a large bill – when you have ostensibly not made any big purchases. But small spends accumulate into large amounts of money. It is wiser to use your credit card only for large purchases for the home or to buy travel tickets and holidays. We recommend using the Dubai duty free credit card for travel-related spends to earn several points and access to unique experiences.

Does this article help you streamline your credit card usage? Tell us in the comments below.

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