By taking credit cards, we are there for our convenience, but often it becomes our problem. The main reason for this is to use it excessively. We also fulfill our small needs through credit card. Whereas the rule of credit card spending says that it should be used only when there is no other way left. But its excessive use leaves no way for us. In such a situation, people get overwhelmed with credit card loans. Credit cards charge a lot more interest than a loan from a bank, so this pressure is further increased. And in such a situation, people get caught in the borrowing net. Let us know how to use credit cards properly, so as not to fall into the trap of borrowing.
Never Withdraw Money From Credit Card
Many people also withdraw money from credit cards. This is the world’s most expensive loan, which should be avoided. Instead, it is better to avoid that expense, or take a personal loan from a bank or any financial institution. According to experts, never take money from a credit card. Interest starts on withdrawing cash from credit card, which is taken till the day of its payment.
Shop According to The Payment Capacity
Purchase as much through a credit card as you can at the end of the month. Never shop more than your monthly budget. Otherwise it is certain to get stuck in debt trap.
Learn the Rules of Use Abroad
Banks use extra charge if you use a credit card abroad. Apart from this, cross currency charges are also levied for international transactions. This makes the use of credit cards expensive. In such a situation, if possible, do at least the transaction, so that the fee will have to be paid less.
Get Paid on Time
– Always remember the date of bill filling after spending with credit card. Each credit card is accompanied by a cycle of its payment date. So never forget the last date. Often people forget the due date, which leads to interest on delayed payment. This interest is very high.
Do not Get involved in Minimum Payment
– People make purchases with credit card, and defer full payment by paying minimum bill while filling the credit card bill. Paying the minimum amount every month is usually about 5 percent of the total bill, but this method is not good. The credit card issuing company does this by adding full interest to your remaining bill, and recovering it. You have suffered a lot from this. So pay in full by credit card, do not get caught in the minimum payment.
Avoid Rollover of Credit Card Bills
– Always avoid rollover of credit card bills. Credit card companies always charge the highest interest on rollover of bills. After the minimum amount due, the remaining amount moves to the next billing cycle. It charges a lot of interest and interest.
Know how Much Interest is Charged
-Credit card companies collect interest according to daily balance method. Credit card companies usually charge around 3.5% interest every month. But it becomes 42 per cent annually.
Credit card limit, check your limit
-Credit card companies want you to spend more and more. This is why she makes your limit much higher. Apart from this, the scheme of more reward points runs on your more purchases. But use the credit card only on your need and not for the reward point.
Think Before Taking a Second Credit Card
Credit card companies are always ready to give you second and third credit cards. But with more cards, your non-essential expenses also increase. In such a situation, always understand your need and accordingly decide the number of cards.
Reward Points Increase Expenses
-Credit card companies offer you cash back, reward points and travel points schemes for maximum purchases. When these points are collected, they are often asked to make additional purchases at their expense. It is a cycle in which one should avoid getting trapped. It keeps increasing the expenditure continuously, which puts the risk of getting trapped in the debt trap.