How often have you missed out on that 'cash back' offer on your credit card?

Weren't you surprised when you were sent a pre-approved loan on your credit card at a discounted rate of interest?

While such gimmicks let credit card companies laugh their way to the banks, it is you who end up feeling miserable. To avoid such mistakes, here are some tips you may find useful.

Go through the various offers made by your credit card company carefully. Many people forget to do this and hence lose out good opportunities.

For instance, some periods are earmarked for cash back or reward offers. If you keep track of these dates and postpone or advance your purchases, you can reap those benefits. Credit card companies often send mailers or advertise such offers through different media, including their own websites.

Sometimes, if you book air ticket/s from a particular airline through your bank's credit card, you get a certain amount of cash back; this is usually as a percentage of the total amount you spent on the ticket/s. However, if you are not aware of this benefit, you may buy the same ticket through other means and not be able to avail of this offer.

Again, you need to keep your eyes and ears open to avail of such offers. The means to advertise them remains the same.

• Are you revolving on your credit card?

Very often, you will be told by your card company that you can have a DD or a cheque mailed to you as a loan since you are a 'chosen' or 'esteemed' customer. They also tell you that the interest rate for this loan would be less than the interest rate charged for a personal loan. Read the fine print thoroughly, and ask questions about it, before going for such offers.

For instance, the processing fee on this loan plus the service taxes and other undisclosed factors may nullify the 'less interest' charged on this loan.

In case if you've made a large payment on your credit card for any big purchase you may have made, say a television set or some new furniture for your home, you may get a phone call from your card company. They may say they'd be pleased to convert that particular payment into a 'flexi-pay' scheme in which you can pay the money back in installments.

Again, don't forget to check the cost of the processing fee and the eligible rate of interest. It could be considerable. In that case, if you have the money, just pay the credit card bill.

• When your credit card is your enemy

If your credit card bill and some other commitments are due around the same time, don't think twice... pay the card dues first. Take withdrawals from PF/ PPF or break that FD with your bank if possible. Don't get into a debt trap with the credit card company.

Try to always have your money (or be sure it's coming by way of your salary or in any other form from your employer) before you spend through your credit card. Maintain a record of the goods you buy on your card and keep aside (mentally) that much money in your savings bank account.

You could even tell your bank to pay the card bills through electronic clearing system, ECS. This is a mechanism whereby you instruct your bank to debit a fixed sum from your savings account on a particular date. The bank does it for you, provided you have enough money in your account.

This will ensure the first payment is made to the card company before the due date. As a result, you will maintain a good track record with your credit card company. You will also save the money you would have otherwise paid as the late payment charge because you missed paying your bill by the due date.

Read the card statement carefully (you could check it online if possible). Check if the 'cash back' amounts (if you are eligible for it) are credited; find out if you have got petrol surcharge reversed; if not, do alert the credit card company and get the error rectified.

I was once surprised to find that a sum of over Rs 150 was not credited to my credit card account. This was because the 'cash back' that was due to me was not reflecting in my bill statement. I called the help line official, who quickly corrected the error.

• Getting a credit card? Beware

Some card companies advertise their 'toll free' help line numbers. Some don't. Try to find those phone numbers. Otherwise, for most of your queries, the hold time and talk time put together crosses several minutes. Without realising it, you may increase your phone bill if you're not using the toll-free line.

Don't ask for a duplicate statement (unless it's free). Check it online at the company site and take a printout for yourself.

In the US and the European Union, customers who pay their bill on time regularly get a reward for not being a liability for the company. If you pay your credit card bills promptly, you must check periodically with your company about increasing the credit limit or cash limit.

Last but not the least, DON'T withdraw cash from the ATM unless it is a real emergency since you will be charged the standard 2.5 per cent interest from the time you withdraw the money. Besides, you will also be charged a cash withdrawal fee. Instead, try to pay through a bank cheque or borrow cash from a friend that you could return soon.

Get Ahead reader Wing Commander Manoj G Puranik sent these dos and don'ts after reading '5 ways to make credit cards your best friends'.

"I'm jotting down some other suggestions from my own experience. I hope some of you would find them useful," he said in a mail he sent to us after reading the above article.

If you have a useful experience -- and what you learnt from it -- to share on matters related to credit cards, personal loans, auto loans, home loans, insurance, mutual funds or the stock market, write to us at getahead@rediff.co.in.

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