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You're in the midst of something urgent and the phone rings. You drop everything to take the call. There's a stranger at the other end. "Do you want a new credit card?" You're justifiably annoyed but, before ! you can slam the phone down, the salesperson at the other end ! dangles the freebies.

Currently, the hottest one is: No fee. No membership fee when you apply. No annual fee when you renew. Now that is something to consider (actually, anything free is!).

1. Use the card as a money management tool

Ever noticed how money vanishes into thin air leaving you desperate for the next paycheck? With a credit card, there is no vanishing act. The billing statement is a reality check.

Instead of blindly settling it, study your monthly st! atement closely. You will get a fairly good idea of your spend! ing patt ern. You may be spending too much money on books or eating out or shopping.

The next step, of course, is to decide whether or not to change that pattern.

2. Avoid cash payments

To add weight to the previous suggestion, avoid using cash for any payment. Take advantage of the fact that you can instantly access interest-free credit.

For instance, during the middle of the month you may want to purchase a frost-free refrigerator. But you may not have the necessary amount of money in the bank. Buy it on your card. By the time your credit card bill arrives, your sala! ry check will be in the bank.

In this case, you did not delay your purchase nor did you pay any interest on it (you would have if you had taken a loan). Tap into your savings only when it's time to pay your credit card bill.

3. Time purchases wisely

Buy big-ticket items in such a way that you get a longer credit line.

Translation: Make heavy purchases at the start of the billing cycle.

The reason: Banks generally prepare the bills a couple of days before the bill date. ! Purchases made at the fag end of the billing cycle or at the i! mmediate start of the next billing cycle will give you a longer credit line. Which means you get more time to pay the bank.

Confused?

This should help clear the clouds. Say your next billing is from 21 September to October 20 and your due date to settle the bill is November 11.

Purchase that home theatre system you fell in love with on October 21, give or take a day or two. You will get free credit till December 11 (around 51 days).

Working on the similar principle, if you feel the need to own more than one card, try and ensure the bill date and due date do not fall within the same period. Ideally, they should be around 15 days apart. In which case, you can decide which card you want to use depending on which one is close to settling time.

4. Use it for official purposes too

Do you travel a lot on work? Then make all your payments on your card -- airline tickets, hotel bills and entertainment.

On presenting the bill to your company, you will probably be reimbursed in a day or two. Take the reimbursed money and put it in a fixed deposit (you can deposit your money for as low as seven days). When it is time to pay your credit card ! bill, your paycheck should be in your hand, enabling you to make the payment. Or, if you choose a one-month fixed deposit, you will be able to repay the bill when the deposit matures.

Not convinced?

Assume your travel bill totals Rs 75,000, including airfare, travel, entertainment and the hotel bill. Settle it on your card. Either you get a hefty advance or the company will settle the bill the moment you return.

But the due date on your credit card bill is still around a month away. Rs 75,000 in a! 30-day deposit will earn around Rs 312 at a measly five perce! nt per a nnum. Even if you make seven trips a year, you stand to earn around Rs 2,184.

The icing on the cake: you don't spend a pie from your pocket.

Your bank makes the payment, your company reimburses the money and you earn interest.

Of course, this makes sense only if you spend huge amounts traveling.

5. Make bonus points to pay your annual fee

If you do use your card a lot, you are definitely going to accu! mulate bonus points on it.

Let's use an example. Say you have a credit card with Bank X. If you spend Rs 100, they will give you 1 reward point.

To get 1 point, you spend Rs 100.

To get 10 points, you spend Rs 1,000.

To get 100 points, you spend Rs 10,000.

Let's say the bank fixes 500 reward points to be worth Rs 1,000 (the renewal fee).

To get 500 points, you will need to spend Rs 50,000 over the year (that's a little over Rs 4,000 a month).

You can then redeem your points against the annual renewal fee.

Of course, if you have a card that has no renewal fees whatsoever, then you can use these points against whatever the bank offers. Probably a voucher, a free gift or a free meal.

Either way, you win.

You can be pretty sure, though, that they won't exchange the points for "free cash". That's where they draw the line.

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