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Credit Cards For Shopping: 5 Tips For First-Time Users

Credit cards are a more secure and convenient alternative to using debit cards or cash when shopping. Depending on the card you have, it can offer purchase and fraud protection. Unlike cash, it can easily be replaced once it gets lost or stolen.

But you need to use your credit card for shopping the right way. If not, you could end up dealing with a considerable amount of debt and other financial issues.

Still, you don’t have to reject credit cards completely. Instead, you must adopt simple habits that will allow you to enjoy the benefits of having a credit card, including rewards perks and cash flow flexibility without its damaging downsides.

Follow these tips to use your first credit card to your advantage.

1. Earn rewards

Use your credit card to earn rewards on your purchases, including cash backs and points for hotel accommodations and airline tickets.

But be cautious when using your rewards credit card. Use it only for items you would usually buy and pay off. Take note of the annual fee, too. Make sure you earn enough rewards that can offset your expenses.

2. Finance a purchase

In most cases, credit cards are not your best option when financing a purchase because of their high-interest rates. But for first-time users, you canenjoy an introductory 0% purchase annual percentage rate (APR). Take this opportunity to pay off an expensive investment with no interest.

Read the fine print carefully before using your card for any promotion that promises 0% interest.

Be wary of deferred interest promotions because this means that if you cannot pay off your balance fully before the offer ends, you might need to pay all of the interest acquired during the promo period. Other credit cards might ask for interest on the remaining balance, but this can still add up swiftly.

3. Know your limits

If you are worried about overspending, consider asking your credit card company to lower your credit limit into the amount you know you can manage to pay monthly.

Another trick is to have a self-imposed limit. After you have spent a certain amount, such as 50% of your total credit limit, put your card away until you pay your bill in full. This will help you stick with your budget and on top of your monthly bill while maintaining a credit limit that you can use during emergencies.

4. Shop online with extreme caution

Online shopping allows you to buy whatever you need without leaving your house. Just click on the “buy” icon and have your parcel delivered to your door.

Be cautious, though, when doing these forms of transactions, especially when using your credit card. To ensure a secure online shopping experience, here are safety tips to bear in mind.

  • Buy only from reputable online sellers or check the site security before making any purchase.
  • Be wary of amazing deals.
  • Avoid shopping online using public Wi-Fi – if you do, use a virtual private network or VPN.
  • Don’t fall for email or SMS scams.
  • Protect your personal information.
  • Keep the details after buying, including your receipt and order confirmation number.
  • Track your package.

5. Always review your statement

Whenever you receive your statement detailing your transactions during the past billing cycle from your credit card issuer, read it carefully. Reviewing your statement will help you catch any unauthorized charges or errors. As soon as you spot any, make sure to report those to your credit card issuer right away to be cleared up. 

Credit cards often come with a $0 liability guarantee, which means that you will not be accountable for any fraudulent charges. However, you can lose such a guarantee if you wait too long to report any errors.

If you opt for an online bank account opening in Dubai or download your card’s mobile app, you can quickly review your transactions in real-time and detect errors much sooner. You can also set up notifications that can alert you instantly of any suspicious activity.

Your first credit card will have a massive impact on your credit history. Using your card responsibly will have a positive effect on it. It will help you earn perks, and even help you qualify for lower interest rates if you want to apply for a loan in the future.

Author Bio:

VenkatMahadevan is currently the head of the Wealth Management and Branch Banking business for Citi’s Consumer Bank in the Middle East. He has 30 years of experience in banking and in Citi, having spent most of his career in various roles in consumer banking and especially in Wealth Management. He also has extensive experience in the various aspects of Off-shore Wealth Management. He has worked with Citi in India, USA and Singapore prior to moving to the UAE.

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