Do's and don'ts while using a debit - Motilal Oswal
Do's and don'ts while using a debit - Motilal Oswal

Do's and don'ts while using a debit / credit card

Getting a debit card or credit card is one part of the game. The bigger challenge is maintaining its security, keep it safe, using it judiciously and keep a track of your expenses. That is the bigger challenge. Let us now look at some major dos and don’ts of credit cards and also let us some dos and don’ts of credit cards. Here is a quick primer.

You cannot afford to lose tab of your transaction; yes one of them
You need to set up a system to monitor all your transactions. Thanks to online card access, you can easily check on a weekly basis to reconcile and if there is any discrepancy then immediately bring it to the notice of the card bank. Always monitor your transactions through mobile/ e-mail alerts. If you get a mobile alert, make sure you read the complete message from credit card provider. Make it a regular and unflinching practice to read and verify your monthly credit card statement. If you find difficult to remember all your purchases, then it is better to save all the counterfoils and receipts and compare it with your credit card statement each month. Remember, all credit card and debit card slips are in thermal paper and will vanish after some time. It is better to keep a photocopy or even a scan copy for your records. When you notice any unauthorized transaction, call up customer care and inform them immediately with the specific details of the transaction and also sign the transaction rejection statement at the bank.

Ensure that your credit card usage is not hampering your credit profile
The credit profile pout out by CIBIL can worsen in our case if you are not cautious with your spend/limit ratio or your EMI/income ratio. Credit card providers constantly are required to share details of your repayment with several credit agencies like CIBIL Trans Union, Equifax etc. who in turn rate you on a credit score ranging from 300-900. It is a sensible practice to buy your credit score and complete report, at least once in a year to keep track of your credit history. Most banks and aggregators are now giving your credit scores free of cost but even otherwise it just costs around Rs.700 per year, which is hardly anything. Your credit is an index for lenders about how likely you are to pay back loans or credit card dues based on your past repayment behaviour. The higher your score, the more the chance of your loan application getting approved! If you find your credit score deteriorating, then immediately find out the reason and take corrective action.

You must remember your credit card number, or at least have it in safe place
Using a single credit card gives maximum benefit in terms of reward points and it is also a lot easier to handle. It is advisable to remember your credit card number so that in case you lose or misplace your credit card somewhere, you can immediately report it to the customer care. Remembering the credit card number also simplifies the process during online shopping. The 16 digit number is a key number to block in case your wallet or your cards get lost. You need to immediately block to prevent misuse. Also make it a point to pay your dues on time as otherwise you incur charges and also it impacts your credit score. These are some of the basic dos to remember. Don’t let the credit card outstanding balloon too much.

Let us also look at some important don’ts with respect to use of cards

There is a cost associated with missing card payments both in terms of penalty and in terms of impact on your credit rating. Don’t buy into the revolving credit offer. You can make the best use of the 45 days credit but make it a point to pay off as much as you can afford. Of course, don’t forget the expiry dates of your expiry points and make it a point to monetize the same on time.

Never utilize your credit limit to the hilt as it impacts your credit score. Only spend on a card that which you can afford to repay in the next 3 months. The ideal situation is to use only up to 50% of the credit limit sanctioned to avoid negative impact on your credit limit as well as your credit score.

Don’t share credit card information like number, PIN, OTP with anyone; not even with your friends and family members. Ensure to enter or key-in your IPIN over the conversation with customer care and do not spell it out. While entering PIN in a shop keep it covered.

Lastly, never use your credit card and debit information on a website when you are using a cyber café or when you are in public wi-fi locations like airports, railway stations, malls etc. Ensure that it is a trusted website which uses https:// and not http://.