6 Mistakes to Avoid After You Get a New Credit Card

Before getting a new credit card, it is advised to do a thorough research on the features and benefits as well as the fees and charges associated with the card. You should also have a fair understanding of how credit cards work. However, after you get a new credit card, you are faced with a completely new range of potential mistakes, which you must avoid to maximise the benefits of your new card. While the basics remain the same across all cards, such as clearing your dues on time and avoiding cash withdrawals, certain new-card mistakes could also hamper the value that you get from your card.

Here are some common mistakes that people make after getting a new credit card:

1. Leaving the card inactive

Many people still think that getting a card and leaving it unused will help in building or repairing their credit score. However, as per RBI guidelines, the card issuer cannot create your new credit card account unless you activate the card. As a result, inactive cards will not have any impact on your credit score. You have 30 days post card issuance to activate your credit card, after which you get a grace period of 7 days. A card that remains inactive after 37 days of issuance will be closed by the issuer. Hence, you must activate your credit card within the defined window.

2. Missing the sign-up bonus

Most credit cards offer a sign-up bonus or welcome bonus. This benefit may come in the form of bonus reward points, complimentary membership, one-time discount offer, free flight ticket voucher, etc. However, sign-up bonuses usually have certain strings attached. You might need to spend a particular amount within the first month or the first 3 months to avail this benefit. While you should not spend beyond your means to hit the minimum spending requirement, you can strategically plan your spends. For example, you can pay for a big lunch bill at office using your card and have others pay you back. An important point to note here is that returned purchases do not count towards the spending threshold. Some cards may also not count transactions converted into EMIs.

3. Skipping digital set-up of the new card

Card issuers provide the facility to manage your credit cards online. One of the first things that you should do after you get a new credit card is registering the card on the online platform of the issuer. Moreover, now new credit cards come with online spends, international spends and contactless spends disabled by default. You need to enable the same online for which you would require digital set up of the card. The process is quite easy. You just need to register your card for the first time and then use the login ID and password to access your credit card account. Without digital set up, it would be difficult to manage the card.

4. Ignoring additional perks

Rewards and cashback are the most important aspects of credit cards. However, there are several other additional perks that add value to your card. Not paying attention to such perks may reduce the overall value that you get out of your card. For instance, a travel credit card could offer you complimentary membership to a lounge access program or a frequent flyer program. You might need to enrol into the said program in order to avail the benefit. Your card may be providing substantial discount at a hotel chain but you may first need to register for their program.

5. Not handling reward redemptions wisely

Most credit cards offer reward points on the purchases that you make but these rewards do not carry an equivalent monetary value. When redeeming the points, it is important to consider different redemption options and the value offered under each option. For example, you could get Rs. 0.25 for redeeming your rewards for cash credit whereas on transferring to an airline or hotel loyalty program, the value could be Rs. 0.75. This is an important consideration, especially if you have upgraded your card and transferred points into the new card.

Also Read: 5 Ways to Make the Most of Your Credit Card Rewards

6. Missing discount or accelerated reward offers

Some credit cards may provide direct discount or extra rewards with select merchants or platforms. If you do not use your card strategically on these platforms, you will miss such additional savings. Some cards also offer accelerated earnings on select categories. Knowing about such offers and keeping different credit cards designated for different types of spends could help you fetch maximum value. More than knowing, you should develop a system for remembering these bonus categories and utilize them smartly.

So, even if you know how credit cards function and how to make the most of their rewards program, making the most of the introductory offers is equally important. As soon as you get a new card, activate it, register on the bank’s online platform, set up usage controls and then start using the card. Understand the welcome benefits and the conditions you must meet in order to get those benefits. Overall, continue using the card within your means and make timely payments to make the most of it.

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