For most economically active people, credit cards are a lifeline when it comes to financial transactions. Whether buying at retail outlets, shopping online, paying telephone or electricity bills, booking air tickets and hotels, credit cards are being extensively used across the country. However it is essential to make prudent use of credit cards as they can greatly impact your credit history and credit score.

Did you know that credit cards can in fact help you to improve and build your credit score if used responsibly and wisely! Here are a few tips on how to use your credit card wisely and making it work for strengthening your CIBIL report and CIBIL TransUnion Score:

> Read the fine print when you avail a credit card. Know all details about the interest rates being applied, duration of the grace period being offered, and any fees being charged. Many people are unaware of the fact that interest rates can be negotiated, so do a thorough research when you apply for a credit card.

> Pay your credit card balance on time: Paying off credit card payment in full every month is the best way to avoid credit card debt.

> Do not avail too many credit cards. Do not to apply for too many credit cards. If you have made applications for credit cards, this will reflect in the "Enquiry" section of your credit report and will negatively impact your credit score. Also managing too many cards is surely tough, and you are more likely to miss out on some payment or the other, and slowly inch your way towards a debt trap.

> High utilization of Credit Limit:While increased spending on your credit card will not necessarily affect your score in a negative manner, an increase in the current balance of your credit card indicates an increased repayment burden and may negatively affect your score.

> Be credit wise: Gaining a wise knowledge of your personal finances and learning how to manage them, and developing a plan that monitors your spending activity is essential so you do not lag behind in your monthly card payments and end up in debt.

> Access your credit score and report: Knowing what's on your credit report will help you in managing your finances better and also alert you on any possible identity thefts and incorrect information on your credit report.

If you own a credit card, start following these simple steps, so you do not fall victim to credit card debt trap.

(Contributed by Harshala Chandorkar, senior vice president- consumer services and communication, CIBIL)