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Tips On How To Use Credit Cards Smartly In Times of Covid-19

Author: Viral Bhatt/Wednesday, July 8, 2020/Categories: Exclusive

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Tips On How To Use Credit Cards Smartly In Times of Covid-19

Though credit cards are generally rewarding and can help you bail out of any financial problem, using it in the times of Covid-19 can be a risky affair. Read below a few credit card tips you should be following to stay in a healthy financial state.

We love using credit cards for shopping clothes, stocking up groceries, paying off hospital bills, or meeting any financial emergency, etc. The credit card is a savior at all times. Gone are the days when a credit card was only for the affluent, today almost every salaried and self-employed individual possesses a credit card. However, swiping the credit card has become an easy option for all in the tough corona times owing to job loss, pay cut, untimely salary payment and other turbulent situations. But these are the times that one shouldn’t go overboard on spending with a credit card as it can land one in steep financial trouble that one might find hard to get rid of.

Follow below the credit card tips to ensure you don’t fall in credit card debt consolidation. The best option in these volatile times is to consolidate all your credit card debt. If you have a good credit score, then most lenders will be more than happy to offer you a personal loan at a low-interest rate. Today, if you haven’t opted for a moratorium and don’t have a high income to debt ratio then you can easily get a personal loan. Moreover, banks will also be happy to consolidate debt on another credit card provided that your credit score is good and you have a clean repayment track record.

Don’t fall for convert to EMI option

You will instantly start getting calls from banks as soon as you make a big purchase using your credit card. Though you may quickly get tempted to opt for the ‘convert to EMI scheme,’ but don’t do so. This option carries a processing fee and high-interest rates. Also, your credit card limit will be blocked until the time you don’t make the EMI payments. You will instead end up paying more than the actual value.

Check your credit card bill every month

This is a general practice that you should be following. Check it to find out if you have been additionally charged for anything i.e. any hidden charges, processing fee, insurance premiums, etc. If you find any such deductions, contact your bank immediately and instruct them not to debit any charges without any authorization from your end. Also, you may get calls to reduce your credit card or debit card EMIs too, don’t fall for it as you may end up paying an additional processing fee and interest charges.

Don’t shop for everything from your credit card

It is a universal truth that people end up overspending when shopping using a credit card. The thought of buy now, pay later does tempt any customer to engage in extra shopping. Right now, apart from shopping for groceries don’t spend on buying any gadgets, clothes, or any accessories until it is not necessary.

Remember, these tough times may last longer and your company has not promised you the job for a lifetime. So, spend only what you can repay easily without having to depend much on your source of income.

The moratorium will not benefit you much

Originally RBI offered a moratorium on loans and credit card payments for three months, but with the rising number of cases, the moratorium is extended for an additional three months i.e until August. Your credit card may not be impacted much by moratorium as you will have a hefty overdue amount and interest charges to bear in post-lockdown. Also, note that for any fresh purchases you make, the interest will start accumulating immediately. So, if you can easily pay off your credit card outstanding amount then don’t prefer to opt for moratorium unless you have other emergency expenses to handle.

Don’t lose your credit card

You need to be extremely cautious in these stressful times as you may not get your credit card replaced easily. Banks are operational with minimum staff and losing out on the card has also security implications. So, handle your card with much care.

Use the reward points

Banks generally offer you coupons and discounts in exchange for reward points. You can check your reward points in an easy way through your bank’s net banking website. You can use the reward points for purchasing essential items.

The above-mentioned tips are easy to follow are for your financial well-being. Ensure that you follow them and never let your bad financial management impact your future finances.

The author is head and founder of Mumbai-based financial advisory firm Money Mantra. He can be reached at


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