INSUBCONTINENT EXCLUSIVE:
Credit cards are one of the most popular
financial instruments which used rightly can reap you great benefits
However, if irresponsible habits kick in with credit cards, it can lead to mounting debt.To make sure that you never fall into such debt
habit of spending more than you can afford
Overshooting you limit may also take your credit card score low
You should ideally not use more than 20 per cent to 30 per cent of your credit limit and make sure that you clear the entire credit card
balance, else it gets carried on to the next statement thus reflecting poorly on your credit utilization again.Avoiding Cash
WithdrawalsCredit cardsalso allow you to withdraw cash from ATMs and while there's an interest-free period for all other credit card
transactions, the interest rate applies immediately for such withdrawals
This option should be exercised only in emergencies and make sure to repay it as soon as possible to avoid the hefty interest rate.Pay the
Full Amount DueMost credit cards do not charge any interest if you pay the amount owed within an interest-free period, which is typically 40
However, they also give an option to pay a minimum balance owed, generally 5 per cent of the due amount
This option should be sparsely used only when in emergency need as you could end up paying hefty interest
Constant payments of only minimum balance dues, will only make you pay more and more interest, so make sure to clear the pending amount as
soon as possible.Avoiding Late PaymentsA late payment on your credit card bill can be disastrous in many ways
Firstly, your credit score gets affected, and secondly you have to pay a late fee each time you are late in paying dues
While some banks charge a standard late fee, some charge a percentage of the amount due as late fee
Some may even charge an additional fee if ECS for the credit card payment gets rejected
In case you don't have the full amount to repay your card, make sure to at least pay the minimum amount due, in order to avoid the late
payment penalty.Monitoring International TransactionsIf you visit international destinations frequently, whether for work or holidays, make
sure to get a credit card with low transaction fees
Additionally, make sure to carry cash for longer stays or a travel card with no transaction fee for POS swipes as frequent swipes on your
credit card can add up to a heft bill of transaction fees.Changing PIN FrequentlyCybersecurity threats always loom over your financial
Credit cards are vulnerable to misuse
Your card information stored online can be used for fraudulent transactions, both offline and online
Make sure you change your PIN frequently and use trusted sites only for payments in order to avoid facing such frauds.(Adhil Shetty is CEO
of Bankbazaar.com)Disclaimer: This is an advertorial and TheIndianSubcontinent is not responsible for the accuracy and completeness of the
