Tips for using a free credit card responsibly

As the name suggests, a free credit card has no joining or annual fees. Such credit cards work like your regular cards but may miss out on some benefits that only premium cards can offer. However, that does not mean they are not useful.

These cards are simple to use and offer effortless maintenance. They don’t have any hidden charges. But that does not mean you use them carelessly, as your spending becomes the financial liability you need to pay off at the end of the billing cycle. Otherwise, it can have serious financial implications and harm your credit score.

Understanding Free Credit Cards

1. Definition and features of free credit cards

What is the meaning of a free credit card? A free credit card is a payment card that doesn’t charge any joining, annual, or maintenance fee from the users. Alongside, these cards also cover all benefits of a general credit card.

The features of the free credit card are:

• You don’t need to pay any annual fee for taking the card facilities.
• These cards cover basic features like tracking credit scores, reports, regular credit fitness, and access insights.
• They provide benefits like rewards, points, and bonuses.
• Furthermore, they have special benefits like flexible rewards redemption, airport lounge access, dining discounts, movie offers, and more.

2. Eligibility Criteria and application process

The basic eligibility criteria free card:

• Your age must be between 18 and 65 years old.
• You must have a stable employment record – either salaried or self-employed.

And the application process is as follows –

1. Go to your credit card provider’s website. Choose a free credit card from the bank’s lifetime free credit card list.
2. Check the eligibility criteria and start your application by clicking the ‘Apply’ button.
3. Enter the required details.
4. Next, submit the essential documents – ID, income, and address proofs.
5. Finally, click the ‘Submit’ button.
6. Benefits and limitations of free credit cards

Benefits –

• You can build your credit score by repaying your credit card bills timely.
• These cards offer rewards, offers, discounts, and cash back. You will get them without paying additional charges.
• You can manage your large spending by breaking it into smaller EMIs. This will help to earn higher rewards and more offers.

Limitations –

• The card providers may change the terms and benefit a free card offers. So, all the benefits may not last for a lifetime. Thus check your card’s policy before purchasing.
• Some credit cards may require an upgrade policy. So, this may require some charges too. Thus check the card’s agreement before applying.

Tips for Responsible Credit Card Usage

1. Understanding your credit card terms and conditions

• Interest rates and APR

When you fail to pay your credit card bill monthly, you must pay an additional amount for your outstanding due as per the interest rate set by the credit card provider. Also, you should consider the APR (annual percentage rate) in this regard, and it’s the annual interest rate for not paying your bill fully within a financial year. So, avoid delaying your bill payments to avoid accumulating additional debt.

• Grace periods and due dates

You must pay your credit card bills on or before a particular date in your monthly billing cycle. This is your due date, and if you fail to pay your bill within this date, the credit card providers can offer some additional time to pay your bill. This is known as a grace period. You don’t need to pay any charges if you pay the bill within this period. After this time, the banks levy interest charges on your outstanding.

• Annual fees and other charges

Unlike premium cards, there are no annual or other charges for using a lifetime free credit card. However, foreign transaction fees, cash withdrawal fees, etc., may apply.

2. Protecting your credit card information

• Safeguarding your physical card

Your credit card carries some sensitive information which can be misused. So always keep it in safe custody. Never keep your card in public places such as offices, car and don’t share images of your card on social media. Also, protect the PIN and CVV and do not share them.

• Using secure online transactions

Always use your laptop/mobile and a private Wi-Fi or VPN for online credit card transactions. Also, prefer your merchants’ official links to pay bills for your online shopping, as these are secured methods for online transactions.

3. Avoiding scams and fraudulent activities

• Being cautious of phishing attempts

Using two-factor authentication for your credit card is the safest procedure to stop phishing attempts. It will block the hackers from accessing your account details. Again, set alerts for your credit account, and it will inform you about unauthorised transactions, money laundering, etc.

• Monitor your credit reports for unauthorised activity

Regularly monitoring your credit reports helps you identify errors and unauthorised charges. Also, you can check other discrepancies and fraudulent acts on your credit report. So, keep your eyes open. Otherwise, you will face unnecessary credit loss.

Contacting your credit card issuer for any concerns or issues

Report lost or stolen cards promptly

Inform your card issuer immediately if your card has been lost or stolen. The issuer will block your card so that nobody can use it further. Some credit card providers offer free-of-cost liabilities for cards stolen or lost.

Addressing billing discrepancies or fraudulent charges

Call your card issuer if you experience any fraudulent charges or billing. This is the most convenient way to inform them. Additionally, most card companies have online chatbots to solve these problems. You will get a quick resolution by using any of these methods.

Conclusion

Using the tips in this article, you can manage your credit card efficiently and effectively. Once you know the actual credit card meaning in terms of benefits and convenience if offers, you can gain maximum advantage on every spend. However, remember that credit cards enable you to make quick purchases, but they do it by accumulating debt. So, being responsible while using them is highly advised. To sum up, free credit cards may seem like a great proposition, but remember to use them in a way that benefits you.