When you use a credit card to make a purchase, you're essentially using the credit card company's money. You then pay that money back to the credit card company, with or without interest, depending on the timing of your payment. Your credit card company gives you a credit limit you can make purchases against.
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A credit card works by letting you borrow money from the credit card issuer to buy goods and services. You then pay the amount you've borrowed back either in full, or in monthly instalments. If you don't repay in full, you'll also be paying interest. You're able to spend up to a certain amount on the credit card.
To build credit with your credit card, make at least your minimum payment on time every month. If you miss your bill's due date, the card issuer may charge you a fee and you could lose any introductory or promotional interest rates on your account.
If you don't use your credit card, the card issuer may close your account., You are also more susceptible to fraud if you aren't vigilant about checking up on the inactive card, and fraudulent charges can affect your credit rating and finances.
While some credit cards won't expedite and others might charge you for this service, some issuers will agree to expedite your shipping for free. ... Once your card arrives (in 4-6 business days), you can activate your card online or via the phone and then you can use your credit card immediately.
Best Credit Cards Based on Top Categories
| Credit Card | Best For |
|---|---|
| HSBC Visa Platinum Credit Card | Travel, Dining, Movies |
| Citi Cashback Card | Cash Back |
| IndusInd Bank Platinum Credit Card | Lifetime Free Card |
| IndianOil Citi Credit Card | Fuel |
Many issuers also allow cardholders to activate cards via an app on their smartphones. First, download the app from Google Play (for Android) or the App Store (for iPhone). Use your phone's camera to scan your card when the app prompts you. Enter any other information the app asks for and you're done.
Nothing much happens if you don't use your credit card for a month. You'll just need to keep up to date with your monthly payment if you have an existing balance. ... And on top of that, you'll still receive a monthly statement if you don't make any purchases, but there won't be anything new to pay off.
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In a Nutshell
So it's a good idea to try to keep it under 30%, which is what's generally recommended. But that advice isn't a shortcut to improving your credit. Plus, the impact that your credit utilization rate has on your credit scores and reports might also depend on a number of other factors.
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