Site icon Smarts Relay

Credit card: Dos & don’ts

Credit card: Dos & don'ts

Credit card: Dos & don'ts

Credit cards have become an essential financial tool in today’s modern world, providing convenience, security, and financial flexibility to individuals. These plastic cards allow users to make purchases, access credit, and enjoy various benefits and rewards programs. In India, one prominent credit card issuer is HSBC, offering a wide range of credit cards, including the HSBC credit card and HSBC Cashback credit card. These cards provide users with a plethora of benefits and perks, making them a popular choice among individuals seeking financial freedom and rewards.

The Importance of Credit Cards

Credit cards help meet various transactional purposes and can be utilised for attaining your distinct crucial financial life goals. Listed here are some crucial reasons credit cards are considered an important financial product.


Credit cards offer great convenience in making payments, permitting users to perform buys both offline and online without carrying massive sums of money in their pocket for the transaction.

Emergency fund

Credit cards can act as a backup during unforeseen circumstances, providing a temporary financial cushion when needed.

Building credit history

Responsible credit card usage helps individuals establish a credit history, which is crucial for future loan applications such as mortgages or car loans.

Reward programs

Many credit cards, including the HSBC Cashback credit card, offer attractive rewards such as cashback, reward points, airline miles, or discounts on specific purchases, allowing users to maximise their spending.

Dos of using credit cards

Pay your bills on time

Timely payment of credit card bills helps maintain a good credit score and avoids late payment fees.

Example: Set up automatic bill payments or reminders to ensure you never miss a due date.

Understand your credit limit

Stay aware of your credit limit to avoid overspending and exceeding your capacity to repay.

Example: If your credit limit is Rs 50,000, try to keep your monthly spending below that threshold to maintain a healthy credit utilisation ratio.

Monitor your statements regularly

Review your monthly credit card statements carefully to identify any fraudulent or unauthorised transactions.

Example: Check your statements online or through mobile banking apps to keep track of your expenses and detect any discrepancies.

Maintain a low credit utilisation ratio

Aim to utilise only a fraction of your available credit limit to demonstrate responsible credit usage.

Example: If your credit limit is Rs 1,00,000, try to keep your outstanding balance below ₹30,000 to maintain a favourable credit utilisation ratio.

Set a budget

Plan your expenses and use your credit card within a predetermined budget to avoid impulsive purchases and excessive debt.

Example: Create a monthly budget that outlines your essential expenses and discretionary spending limits.

Redeem rewards

Take full advantage of the rewards and benefits offered by your credit card, such as cashback or reward points.

Example: Use your HSBC Cashback credit card to earn cashback on specific categories like dining, fuel, or online shopping.

Protect personal information

Safeguard your credit card details and never share them with unauthorised individuals or on unsecured websites.

Example: Be cautious while providing your credit card information online and ensure the website has a secure payment gateway.

Use introductory offers wisely

Ensure to capitalise on the benefits such as balance transfer deals to save on incurring interest charges.

Instance: Consider you hold a high-interest balance on a credit card, then you may consider transferring to another card with a lower rate.

Maintain a good credit score

A good credit score improves your chances of getting approved for future loans and favourable interest rates.

Example: Pay your bills on time, keep your credit utilisation low, and maintain a healthy credit mix to build and sustain a good credit score.

Pay more than the minimum amount due

Avoid paying only the minimum due amount, as it will prolong your debt repayment and accrue higher interest charges.

Example: If your minimum due is Rs 5,000, try to pay off a higher amount to reduce your outstanding balance faster.

Don’ts of using credit cards

Don’t overspend

Avoid exceeding your repayment capacity and accumulating excessive credit card debt.

Example: If you cannot afford to pay off the full amount for a luxury purchase, reconsider or save up before making the purchase.

Don’t miss payments

Ensure timely payment of credit card bills to avoid late payment fees, penalties, and negative impact on your credit score.

Example: Set up payment reminders or alerts to ensure you don’t miss any payment due dates.

Don’t share credit card details

Always avoid sharing your credit card credentials including your CVV, card number or OTP with anyone through email, phone or even text.

Instance: Do not fall, victim, to the act of fraudulent calls or phishing scams that request you to provide your credit card details.

Don’t ignore your credit limit

Ensure you remain within the recommended credit card limit. Doing so, allows you to avoid any over-limit charges and potential impact on your score.

Instance: If your limit equals Rs 50,000, avoid exceeding this amount unless you witness any exigency.

Don’t withdraw cash frequently

Cash withdrawals using credit cards usually attract higher interest rates and transaction fees. It’s best to use a debit card for cash withdrawals.

Example: Avoid using your credit card for cash advances unless it’s an absolute necessity.

Don’t rely on minimum payments

Paying only the minimum amount due leads to higher interest charges and longer repayment periods.

Example: If you have the financial means, aim to pay off the full outstanding balance or more than the minimum amount due.

Don’t make impulsive purchases

Avoid impulsive buying decisions and consider the necessity and affordability of purchase before using your credit card.

Example: Give yourself a cooling-off period before making significant purchases to determine if it aligns with your needs and budget.

Don’t ignore changes in terms and conditions

Stay updated with any changes in your credit card’s terms and conditions, interest rates, fees, or reward programs.

Example: Regularly check the HSBC website or communication channels for any updates or amendments to your credit card terms.

Don’t co-sign for others

Think twice before co-signing a credit card for someone else, as it makes you equally liable for their debts.

Example: Avoid becoming a co-signer unless you fully trust the individual’s financial responsibility and ability to repay the debt.

Don’t close credit cards frequently

Closing credit cards frequently may impact your credit score and credit history length.

Example: Unless there is a compelling reason, such as high fees or unsatisfactory service, consider keeping old credit cards open to maintain a longer credit history.


Credit cards, such as the HSBC credit card and HSBC Cashback credit card, play a crucial role in financial management and offer numerous advantages when used responsibly. By following the dos and avoiding don’ts mentioned above, individuals can maximise the benefits of credit cards while maintaining control over their finances. From timely payments and responsible spending to utilising rewards and securing personal information, each action contributes to a positive credit card experience. Remember, credit cards are powerful tools that require discipline and wise decision-making to enjoy their full potential and financial advantages.

Exit mobile version