These days, with the lucrative deals and offers by banks and credit card companies, people hold not one, not two but multiple credit cards for satiating their various financial needs. Although this might benefit them in more ways than one, there are certain pitfalls in this financial pursuit.
These bright and multi colored plastic cash, is being deemed as a fashion statement more than the purpose of their utility, a feature to show off ones class and standards. However, it can also portray the weak financial stability and the strong financial liability you are bearing. It is a fact that credit cards do offer benefits like online cash payments, travel bookings, utility bill payments, entertainment or shopping requirements along with the wider acceptance over the debit card for the above mentioned uses.
But how many of these cards are acceptable? It is true that, in order to limit and keep a check on your financial spending, separating each credit card for their uses can help you achieve that goal. But problems like missing payments, overlooking deadlines, inability to track error’s, be it from your side or from the bank etc., are something that you might have to face. This will only initiate further debt crisis in your financial standing. The possibility for seeking a home loan or a personal loan in future is greatly minimized due to a poor credit history as mentioned in your CIR document. In order to avoid such situations, here is what you can do:
Opt for co-branded cards:
The main advantage of these cards is that they do not generate a monthly bill unlike the vanilla credit cards which can include charges like maintenance charges, monthly charges etc. Presently, the market offers co-branded cards like the ICICI Bank-Big Bazaar credit card or Citibank-Shoppers Stop credit card along with cards for utility bills like petro card, shopping card, airline card etc.
Opt for a card that best suits your need:
In these phases of financial tightness, there is a possibility that one might not be satisfied with just one credit card due to its limited credit limit. In such a situation opting for another card becomes a necessity. Make sure that the other card fulfills your credit requirement. If not, splitting the credit prudently by opting for petro cards, airline card etc can ease your dependency on the credit card.
In order to ensure that you do not go wrong with your repayment plan, make sure that the monthly repayment bill does not clash with each other. For example, if Card A’s repayment is on the 30th of every month, ensuring that Card B’s bill arrives at your door step on the 15th of every month, will help in easing your repayment plan and will give you enough time to repay your dues.
Opt for e-payment of credit cards:
In order to avoid any prepayment penalties it is always best to opt for online payment bills since any delays which otherwise would have occurred if the payment were to be made though cheques, or in the unfortunate circumstance of a typo or a wrong date on that particular cheque can make it invalid and delay your payment. E-payments can take most of that worry away. If for example, you have a billing cycle of one card on the 10th of every month and the billing payment of another card is on the 25th of every month and if a situation arise wherein you will be required to pay a bill after the 10th and before the 25th utilizing the first card can help you settle the bill by giving you some extra time. Linking your credit card to your net banking profile will give you the convenience for online bill payments and also provide you with the information as to what are the unpaid bills in line.