Credit cards are more than just a tool for making purchases; they can be a powerful way to earn rewards, manage your finances, and even enjoy exclusive perks. It allows you to borrow a certain limit of purchases or cash withdrawals from a lender and later you have to repay this borrowed amount, usually every month. But how can you navigate the world of credit cards to make the most of them?
In the latest episode of Mind Your Karza, Finfluencer Anupam Gupta who is an author and podcast host sits down with a content consultant and an avid user of credit cards. Abhishek Puna, who manages an impressive portfolio of ten credit cards.
During a conversation, Puna added that his journey with credit cards began in 2014 when he was living in Dubai.
“Initially, I was scared of credit cards because of the negative perceptions around them,” he added. He then pointed out that quickly realised their value, particularly the travel perks like unlimited lounge access.
Ever wondered how someone juggles 10 credit cards without financial chaos?
In this ‘Mind Your Karza’ episode, @AbhishekPonia reveals his playbook – from maximizing rewards to cracking hidden benefits. Dive into the credit card game you didn’t know existed.
Full episode on… pic.twitter.com/KcoBI381HX
— Anupam Gupta (@b50) August 24, 2024
Further, he added that when he moved back to India, Puna started with a credit card secured against a fixed deposit due to his limited credit history. As his credit profile improved, he began exploring a variety of cards.
“I have around 10 credit cards, but I sometimes close a card if I don’t find it useful anymore or if I find a new one that could be beneficial,” said Puna.
Most people don’t need more than four or five cards to reap the maximum benefits, but having more than that allows them to leverage different perks, from travel rewards to dining benefits, he noted.
Financial Returns from Credit Cards
One of the most intriguing aspects of using multiple credit cards is the potential for substantial financial returns.
“I don’t get too fixated on exact returns. Generally, the lowest return I get is around 3.3%, and the highest has been 33.3%,” added Puna.
On average, Puna derives about 10 to 12 percent return from his credit card spending, primarily through rewards points and cashback.
Navigating Rewards Redemption
Understanding how to redeem rewards effectively is a very important factor.
“Redemption rates vary depending on the card,” further noting that some cards offer excellent returns on travel-related expenses, while others might be better for vouchers or statement credits. Premium cards often provide the best value for flights and hotel stays.
For instance, his top card allows him to redeem points for flights, hotels, or third-party platforms, often resulting in the highest value for his rewards.
Management of Credit Card Benefits
Advisingly, Puna added, “While diving deep into card benefits can be time-consuming, it’s not necessary for everyone.” The key is to enjoy the benefits without letting the pursuit of rewards lead to unnecessary spending.
“The goal is to enhance your benefits without overcomplicating your financial management,” he added.
Double and Triple Dipping: Is It Worth It?
Double and triple dipping involves earning multiple benefits from a single transaction, such as collecting rewards points and receiving store discounts.
“It can be beneficial, but it’s important not to overcomplicate your financial management,” Puna cautioned. The focus should be on enhancing benefits while keeping your spending strategy straightforward.
Disclaimer: Credit card rewards and usage vary by individual and card terms. Always review your credit card’s terms and consult a financial advisor to ensure that it aligns with your personal financial goals and circumstances.
