Have you received your credit card yet? The chic rectangle card looks good and has a lot of potential. However, every user should consider learning the essential credit card rules and regulations to have a great experience.
Knowing these details helps in smart usage, which is equally important for your finances and your credit score. Think of it like this: you’ve planted a lemon tree, and it’s growing well. With the right care—watering it properly and ensuring it gets enough sunlight—it will thrive.
But just like with anything, balance is key. Overwatering or neglecting it could slow down its growth, so it’s important to find that sweet spot for the best results. This is why learning the rules of how to use your credit card wisely is a crucial step in a healthy credit journey.
Credit Card Rules That Everyone Must Know
The following rules can help you understand the process of maintaining your card optimally.
On-time Payments
First and foremost, always try to pay your bills on time and without fail. If your billing date doesn’t match your cash flow or income, you can talk with your issuer and change it accordingly. But you will have to make sure that you are paying off your dues before or on the due date to avoid both late fees and interest.
Minimum Due Rule
If you’re short on cash, pay at least the minimum to avoid hurting your credit score. This option helps you avoid a late payment penalty when you don’t have the required sum. Just keep in mind that the outstanding balance will get pushed to the next month and start accruing interest until it’s paid off.
You will also not get any interest-free period on transctions you do in the next cycle. So, it is best to avoid using your card for new purchases until you pay off the previous dues.
Credit Card Limit
It’s important to understand your card’s limit. Experts recommend using no more than 30-40% of your limit to maintain a healthy credit score and avoid any risk of debt. For example, if your limit is ₹2 lakhs, try to stay below ₹60,000.
This way, your utilisation ratio stays under control and you are also ensuring you are not spending recklessly.
Lost Card Rules
If your card is lost or stolen, act quickly. Follow the necessary steps to protect yourself and avoid further issues:
- Step 1: Contact your issuer right away and get it blocked
- Step 2: Register an FIR regarding this issue if you suspect it was stolen
- Step 3: Scrutinise your statement to check for any suspicious activities
Reporting Fraudulent Activities
If you find any fraudulent activity on your card, report it instantly. Contact your issuer, communicate your worry and go ahead with the suggested course of action. If they don’t give a satisfactory solution, ask them to cancel your card to avoid any further misuse. Either way, delayed action from your side will not bring any fruitful results.
Reward Structure
While using a credit card, keep track of how to earn and redeem reward points before they expire to make the most of your card. Check which transactions give you maximum points and what the terms are. Also, check the reward redemption fee, if any.
Cash Advance Rules
Learning the cash advance rules is another great way to enhance your credit card journey. With this feature, you can use your credit card to get cash from the nearest ATM during any emergency. However, understand the following terms before making a call
- Interest rates on cash advance
- Cash advance charges (for processing and ATM usage)
For most issuers, the charges for cash advances are very high. This is why, even though it is a great feature, you must only use it as a last resort. The goal is to keep your credit card bills as low as possible by the end of the month.
Credit Cards – Pros and Cons
Here’s a quick look at the benefits and disadvantages of using a credit card:
| Pros | Cons |
| Access to instant credit for purchases | High interest rates on unpaid balances and cash advances or credit card loans |
| Rewards, cashback, or points on spending | Accumulating debt is easy if not managed properly |
| Flexible repayment options with EMIs | Late payment fees for missed payments |
| Can help build and improve your credit score | Impact on credit score due to poor repayment history |
| Additional perks like discounts, travel benefits, and insurance | Hidden charges and fees may apply unless you are familiar with the Most Important Terms and Conditions (MITC) document |
| Instant access to credit for emergencies | Over-limit fees if spending exceeds the credit limit |
| Track and manage expenses easily through detailed statements | Temptation to overspend, leading to financial strain |
| Better protection from fraud or unauthorised transactions | Risk of missing payments leading to penalties |
Types of Credit Cards
Here’s a look at some of the most common types you can choose from:
| Type of Credit Card | Description |
| Rewards | Offers points or air miles for every purchase made |
| Cashback | Earns cashback on purchases, usually a percentage of the total spent |
| Travel | Provides discounts on travel booking, air miles, lounge access, and travel-related insurance |
| Balance Transfer | Designed for transferring high-interest debt to a card with a lower interest rate |
| Student | Aimed at college students with lower credit limits and easier approval |
| Secured | Requires a fixed deposit as collateral, often used to build or rebuild creditworthiness |
| Business | Intended for business expenses, often with higher credit limits and special rewards |
| Fuel | Offers rewards or discounts on fuel purchases |
Knowing all the types available is essential to choosing the best card that matches your recurring requirements. Once you compare all the types and understand the golden rules of usage, you can consider the One Credit Card. It is lifetime-free and packed with benefits! Its powerful app, the OneCard App, helps you manage bill payments, track spending, and get notified when you’re close to your budget limit.
Plus, you can use the GPS feature to find the best deals nearby and earn 5X reward points on your top two spending categories each month. Visit the website or download the app and apply now.
