Responsible use of Credit Cards

Have you been thinking of reducing credit card bills month on month? Here is my version of the story on extracting the best value out of credit card by optimized and responsible usage. My expenditure on credit card was increasing steadily and this made me to sit down and understand what was happening. I wasn’t spending on un-necessary things for sure. But still every month, my bill used to be high and it was certainly a major instrument of out flow. So, it was obvious for me to understand and cut short on not-so required stuff… recession times you see!

Analysis has to start somewhere and I started by looking at the credit card statement for a couple of previous months. The break up of the statement showed that the spending was massive at shopping malls like Big Bazaar and Food World compared to expenditure on others. Ofcourse the *others* section included petrol bills, online bill payment towards electricity, telephone, mobile and life insurance premiums apart from occasional eat outs. Soon after that break up the root cause was analyzed and fixed it. Now since past two months, my credit card expenditure has gone down considerably.

I am listing down few tips from my analysis:

• Be cautious on what you want to shop in shopping malls.
• Don’t go to shopping malls without a list of things that you plan to purchase and stick to list.
• Even if you find something at a mall which is not in your list, think twice!
• Learn to differentiate between what is required against what is available.
• You get many items which are of better or same quality out side malls for much lesser price. Preferably a small store next to your home could be a better place when it comes to groceries and toiletries. Advantage here is that you pay through cash! which means, you know your limits on expenditure.
• Use credit card to pay your monthly bills online – Since these bills are unavoidable, if you plan well, you have 45 days of interest free money!
• Use credit card only when the situation demand is a must.
• Never ever draw cash from your credit card.
• It is good to have a credit card for unforeseen expenses which tickle us at times!

Believe it or not my credit card statement now shows much lesser amount being spent through credit card. I am sure there might be many other ways to use credit cards more effectively. Feel free to add your tip/suggestion. Also, you may be interested in reading my experiences at Big Bazaar and Food World shopping malls.