Smart use of credit card is when you pay your bill before due date.

Credit cards have gained much popularity over the past years as the go-to alternative payment method – it is convenient to carry a credit card instead of bulky cash. Even if the card gets stolen, you can get it blocked within a few clicks, and it cannot be used without the credit card PIN. All these safety features and the benefits of plastic money make it very convenient to use a credit card.

Usually, credit cards provide 45 to 60 days of interest-free credit. If you pay beyond this period, credit cards charge high interest on the bill amount overdue. So, what are the benefits of paying your credit card bill before the due date?

Avoid Interest Charge

Credit card companies charge high interest on late payment of credit card dues. Hence, you should never miss your credit card deadline. Trying to clear the credit card dues at least 3 to 4 days prior to the due date can help you avoid interest charges.

Improved Credit Score

If you pay your credit card bill after the due date, your credit score takes a huge toll. On the other hand, paying your bill before the due date can help you maintain a good credit score.

Easier Cash Management

Due to the 45-60 days credit facility, you do not need cash to manage your expenses. You can use the credit card to make payments now and arrange enough cash to pay your bills before the due date. Hence, a credit card gives you much-needed financial freedom.

Reduce Your Credit Burden

If you pay your credit card bill early, the credit burden on your card reduces. You can again use the free limit to pay for further expenses.

Peace of Mind

Whenever you owe an amount to someone, it feels like a burden on your head until you repay the amount. The same is the case with credit cards. Paying your credit card bill early can help you keep your mind peaceful by avoiding the tension of interest charges and reduced credit score.

How to Use Your Credit Card Smartly?

A credit card provides an absolutely interest-free advance up to your credit limit for 45-60 days. How can you smartly manage your resources so that you don’t run out of surplus cash and also make some earnings? How can you achieve financial freedom with your credit card?

While there can be many answers to this question, one thing is obvious. Even if you have surplus money, paying through a credit card can open a window of short term investment for your funds. You can earn profits from this capital and pay your credit card bills before the due date. Stock trading is one of the most fruitful short term investments in India. Here are the key requirements to make a profitable stock investment:

  1. Know the Company: It is important to understand a company’s business and its financials before investing. Conducting a fundamental analysis or taking the help of an expert to understand the fundamentals can help you earn higher profits.

  1. Understand Your Return Requirements: You might want extraordinary returns from the stock market in India. But, such gains are rare in the short term. Some positive news or announcement by a company can provide gains on the stock.

  1. Risk Appetite: Your investment decision should be based on your risk-taking capacities. If you invest in a high-risk stock and lose your money, you might not be able to meet the credit card bills on the due date.

While stock trading is prevalent, it comes with market risk. Fluctuation in market prices can easily provide huge gains or even erode your capital. It is essential to invest only with proper knowledge of the stock. This is how you can use your credit card smartly and even earn from it.

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