Published Article Details

How to manage credit cards efficiently

Posted by: Arti Bhargava on Mar 12, 2018, 06.30 AM IST

Nikita Singh is a 35-year old software consultant based in Mumbai. While she and her family are conscious about the need to spend within the limits of their income, they love to indulge in shopping sprees, movie outings, eating out and taking trips.

Nikita also travels a lot for work. Lately, she has been having trouble managing her credit cards. She has missed payments on some of her cards, which have gone into revolving credit. In some cases, she has not been using the cards at all and still ends up paying the annual fee. This is not only cumbersome, but is adversely affecting her credit score.

Nikita realises that she has to streamline her card usage and take stock of all the credit card services she has subscribed to. How should she go about doing this?

First, Nikita has to address the question of whether she needs multiple credit cards, and, if so, how many. Having more than one card is useful in an emergency, when a large payment has to be made or when a particular card cannot be used. Ideally, the cards should have different affiliations like Mastercard and visa cards.

It is also a good idea for Nikita to dedicate one card for official use so that there is no confusion on claiming reimbursement for payments made. Since her job involves a good deal of travel, using a card linked to an airline for official use will let her get better deals and earn points. Two cards, or three at most, for personal use and one for work-related expenses should suffice for her needs.

While streamlining the number of cards she has is important, Nikita should consider retaining older credit cards with good credit history since they would have a positive impact on her credit score. The factors she needs to take into account in this respect include the acceptance of the card, authorised limits, billing cycles and associated costs. Store- or product linked cards add very little value and may even encourage spending.

These should be the first to be closed. Nikita should set up an online payment process for her cards, so she is able to pay the bills from her bank account using the internet or mobile banking services. Having a place to keep credit card slips will make it easy to access them for checking against card statements. She should also sign up for online or mobile reminders of due dates, online statements and payment facility. These will allow her to continue enjoying credit facilities without being overwhelmed by cards.


The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.
This article appeared in Economic Times dated Mar 12, 2018, 06.30 AM IST

Online Courses

Capital Markets
Basic Level
BANKING AND CAPITAL MARKETS

Get the training you need to work in the Banking and Capital Markets industry through this intensive course

Capital Markets
Basic Level
SECURITIES AND OPERATIONS PREPARATORY

This NISM preparatory training is designed to help students whowant to take the securities and operation ex

Capital Markets
Basic Level
DEBT INSTRUMENTS - BASICS

Get a complete understanding of debt instruments in India. This course is ideal for professionals who want

Capital Markets
Basic Level
EQUITY MARKETS BASICS

More people in India are investing in equities and shares creating a need for more skilled equity managers

Capital Markets
Advance Level
EQUITY LINKED STRUCTURED PRODUCTS

Structured products are used to introduce tailor-made investment options in the world of finance. Our cours

Capital Markets
Advance Level
DEBT INDICATORS

What factors affect the debt market? Learn all about debt market indicators to understand the world o

Capital Markets
Advance Level
DEBT MARKET ANALYTICS

Need help to understand the bond market? This bond valuation course simplifies debt bonds, bond yield

Capital Markets
Intermediate Level
CREDIT RATING

Poor credit ratings indicate risky investment opportunities. Learn about the concept of credit rating, its

Capital Markets
Advance Level
EQUITY VALUATION PRINICIPLES

Learn the different principles of equity valuation along with their real world applications.

Capital Markets
Advance Level
EQUITY MARKET INDICATORS

Reinforce your stock market basics by learning about equity market indicators through our online course.

Capital Markets
Advance Level
DEBT MARKETS LEVEL - 2

Understand the structure of debt capital markets and the structure of its primary and secondary markets.

Capital Markets
Intermediate Level
FINANCIAL PLANNING AND MUTUAL FUNDS

Learn to invest based on investment goals and objectives through our Intermediate course on Mutual funds.

Capital Markets
Advance Level
EQUITY MARKETS -II

Learn advanced methods of fundamental and technical analyses of financial statements in capital markets.

Other Financial products
Basic Level
BANKING AND SAVING PRODUCTS

Banking is a highly respectable career choice in India today. It is a growing sector which translates into

Other Financial products
Basic Level
DEPOSITS AND BONDS

The bond market is considered to be one of the safer avenues for investment, providing reliable and consist

Other Financial products
Advance Level
ALTERNATE ASSETS - COMMODITIES AS AN ASSET CLASS

Understand commodities as alternate assets for investing and their different types through our course.

Other Financial products
Basic Level
PERSONAL LOAN AND BUSINESS LOAN

Learn the working behind the process of issuing unsecured business and personal loans from our basic course

Other Financial products
Advance Level
BILL DISCOUNTING AND SUPPLY CHAIN FINANCING

Learn what bill discounting and supply chain financing is and its different features with our online course

Other Financial products
Intermediate Level
INTEREST MARGIN AND LENDING PROCESS

Learn how lenders make pricing and margin decisions during the corporate lending process through our course

Other Financial products
Advance Level
COMMODITIES TRADING

Learn the basics of commodity trading along with how commodity markets function via our beginner's course.<

Other Financial products
Basic Level
MORTGAGE FINANCE

Understand the need for mortgage finance along with the need, EMIs, pricing factors and repayment options.

Other Financial products
Intermediate Level
MATHEMATICS OF LENDING

Understand the concept of impaired loans and the mathematics behind lending through this online course.

Other Financial products
Advance Level
PORTFOLIO MANAGEMENT SERVICES - 1

Learn about the structure, features, operational aspects and positioning of the products on the PMS platfor

Other Financial products
Advance Level
PORTFOLIO MANAGEMENT SERVICES - 2

Learn how to construct individual portfolios and analyse risk and performance to meet investment objectives

Other Financial products
Intermediate Level
LEASE FINANCE & FUNDING

Understand the benefits of leasing assets and different types of lease finance options through our online c

Other Financial products
Intermediate Level
LOAN AGAINST SECURITIES AND INSURANCE

The course guides you to understand its types, eligibility, margins and pricing on loanagainst securities a