At the start of this year, you may set some new year resolutions for yourself that include traveling to that distant exotic country, buying a new home or filing taxes on time this year. While these large goals are great, it’s important that you set a few tinier goals too. If spending wisely this year is of any significance to you, then you might want to learn how best to use your credit card insurance in 2022.
Although you may have availed a credit card for its primary purpose of offering you flexibility on payments and earning rewards for your spends, there are many other benefits offered by credit card issuers that are lost on most people. These benefits include quick approval of personal loans, airport lounge access, travel insurance, health insurance and much more. By not using your card or these features, you are simply ignoring the value and money that these features can provide you.
How to maximise utilisation of the credit card
All that most people do with their credit cards is to make purchases and then repay them the next month. But if you want to maximise the benefits of your credit card and get the best out of it, you can follow these tips:
1) Audit your expenses to identify the highest spending category:
It’s a good idea to analyse your expenses and identify where exactly you are regularly spending the most, say either shopping, dining or travel. This may even be demonstrated by your card-issuing bank itself. Then it will be easy to let go of one card and choose another so that you can increase the rewards earned. Let’s say you earn 2% rewards on one card for your frequent spends on dining. If there is another card that offers 4x rewards for every rupee spent, that is likely to give you better value. For people who largely use one card for all purposes this is a great tip to find the best one according to your spends.
2) Look out for freebies and card discounts:
Many banks offer sign-up freebies for when you use various services for the first time, and make payments with that new card. You might also find plenty of food and shopping apps offer extra discounts to cardholders of certain banks. Exploring those options too will give you plenty of benefits. A special feature that only a handful of financial institutions include is a credit card price protection cover. As the name suggests, for a nominal fee, this plan allows you to recover any excess payment you may have paid for a product that has seen a drop in price within just days of your purchase (say, 30-90 days).
3) Use insurance benefits from credit cards:
Certain travel credit cards or other premium credit cards offer travel insurance or even basic health insurance to their customers. Most people are unaware of this feature or don’t consider it as significant, particularly when they hold other primary health insurance. While insurance from credit cards may not provide all the regular, flexible features of a full insurance policy, it will still be something at the time of an emergency. Speaking of insurance, credit card insurance is also a great way to secure your credit card against fraud and theft, and blocking any transaction that seems like phishing or scamming. Credit card insurance also lets you make one phone call to block multiple cards simultaneously and provides you help to replace any lost cards.
4) Work towards increasing credit score:
Having a good CIBIL score is great for availing loans, increasing your existing credit limit and gaining more benefits from your current credit cards. For this, make sure payments are all made on time, and in full. Along with that, try and use only upto 30% of the allotted credit limit, that will help improve your credit score. Most people utilize their full credit limit and sometimes extend beyond that. This is likely to attract a huge interest rate as well as bring your credit score down. Instead, contact the bank and check for eligibility to increase the limit on your card, while continuing to maintain your expenditure at the same level.
Why you need a card protection plan
Payment through credit cards is quite common today. However, loss or misplacement of the same is associated with a high risk of misusing your card. Hence, opt for a card protection plan offered by leading financial institutions, such as Bajaj Finserv, Kotak Mahindra etc. Individuals can enjoy this insurance scheme by paying a nominal annual premium. This CPP features financial coverage against loss of payment cards and comes with other benefits as well.
Thus opt for a card protection plan to enjoy the host of benefits mentioned above and protect yourself from online fraud. However, note that the benefits and the premium may vary with each financial institution. It is ideal to compare different insurers before finalizing one. Post selecting a financial institution, individuals must contact to know the details of this insurance plan to avoid any inconvenience in future.The card protection plan offers complimentary financial coverage against fraudulent transactions using a credit or debit card arising from phishing, tele-phishing etc.Users can enjoy monetary assistance in case of loss of payment cards during domestic or international travels. Pay the unpaid hotel bills and manage other travel expenses using those cash.
conclusion
There are plenty of people who own credit cards in India, but it is probably safe to say that most of them do not maximize the use of such cards. Cashbacks, travel benefits, insurance or a chance to improve credit score – pick your choice on how you can get the best out of credit card usage beyond the basic feature of spending flexibility. But remember, timely payments and payment of full outstanding amount rather than just the minimum due are critical to ensure that you are able to maintain a good credit score too. Furthermore, you can find reputed card issuers such as Bajaj Finserv who offer credit card insurance or credit card price protection plans and your worries will be reduced.
