As the festivities and celebrations finally begin, it is not uncommon if you end up going on a spending spree. But while shopping, always remember to avoid these mistakes in order to safeguard and protect your credit card and its inherent wealth and privacy.
a) Thoroughly analyze and read the terms and conditions of your card, before signing up for any deal. Often, banks mention all the clauses and procedures about their various deals, rates of interests, conditions for levying of penalty and so on. But customers make mistakes by carelessly skipping through these terms and conditions, ultimately leading to a fall out or debacle in certain procedures.
b) Banks specify a minimum amount due in your monthly credit card statement. This means that the said amount is the least amount you can pay during the month. In order to avoid dishing out the full sum of money, credit card users make the mistake of solely paying the minimum amount due, while they remain under the impression that by paying such an amount, they are preventing themselves from falling in to the debt trap. This is an obnoxious belief as banks charge a higher amount of interest, with every passing month you refuse to clear the entire due sum.
c) Never use your credit card to withdraw cash from the ATM. Banks levy hefty rates of interest on such transaction, and customers struggle to recover from such damage for a long time. Also, banks begin to charge such lofty rates of interest from the moment you have withdrawn cash with your credit card, unlike the usual 45 day period.
d) If you have any differences with the bank, sort it out at the earliest. Do not make the mistake of ignoring the bank’s calls and expecting the issue to vanish into thin air. Late payment fines and penalties will continue piling up until you do not clear all your outstanding dues with the bank. If you have a dispute with the bank, clear your payment and take up the issue with the bank.
e) Keep a record of your credit limit every month. Often, customers fail to remember their limit, and end up facing additional charges by way of overdrawing penalties.
f) In case your credit card has been lost, misplaced or stolen, report the issue immediately to the bank, and the bank will take the necessary action by cancelling the card immediately. If you fail to take prompt action, you will be responsible to clear the dues of any fraudulent transaction that has taken place with your card.
g) The golden rule ‘less is better’ is completely applicable in the matter of credit cards. Often, people maintain an array of multiple credit cards with the intention of having a luxuriously large credit limit, greater offers, and attractive deals and so on. However, this may not always seem like such a rosy choice when you have to keep a track of the due dates of different cards and a huge combo of interest rates for all your multiple credit cards.
h) The most important rule while maintaining credit cards is that to keep your Personal Identification Number as safe and secure as possible. All credit card users must adhere to this rule in order to safeguard your interest.
i) Avoid using your credit card for tax-saving investments, as it may hamper your capital prospects. Also remember that the interest rates levied on outstanding credit card balances can be quite lofty and exorbitant. Take such a risk of using the credit card towards tax payment only when you expect cash inflows in the month. Otherwise borrowing loans like personal loans will be the only option left which can crumble your finances to a minimal level.