Credit Card Mistakes to Avoid: Many people are doing Diwali shopping through credit cards. With its use, not only shopping has become easier but the user also gets many benefits like cashback, reward points on every payment. In case of lack of money in the account, people can complete their work by paying through credit card. Through credit card, you get a loan for short term and you also get a fixed grace period to repay that loan. If you repay the loan within the grace period, you do not have to pay any interest on that loan. Due to all such facilities, credit cards have become increasingly popular among the people. If you have become a credit card user for the first time, then you must know some things related to it, so that there is no scope for regrets later.
Avoid excessive use of credit limit
It is important to take some precautions while using credit cards. The first of which is to avoid excessive use of credit limit. One should avoid using more than 30 percent of the credit card limit. Users should avoid spending large amounts at one go. By doing this the bank may consider the user as financially weak. Excessive use of credit limit can damage your credit score and may cause difficulty in taking loans in future.
cardSuddenlydon’t get it closed
If you have more than one card, do not decide to close one of them suddenly. Suddenly closing a credit card can increase the credit utilization ratio because the credit utilization ratio of the user is being distributed among all the credit cards he has, but if all the cards are closed except one, it will be the same. High credit utilization ratio hurts your credit score. Therefore, even if you do not use the card, keep it active.
Avoid cash withdrawal from card
Nowadays, many credit cards come with cash withdrawal facility. That means, cash can be withdrawn through such a card, but there is a limit on how much cash can be withdrawn. But users are advised to completely avoid withdrawing cash from credit cards. This is because he may have to pay a hefty charge for cash withdrawal. It is said that there is no benefit of interest free credit period on cash advance.
Also read: Tax Rules on Gold: If you are buying gold during Dhanteras, Diwali, then first understand the rules related to tax.
These fees have to be paid for using the card abroad
Many attractive offers are given to promote the use of credit cards. One of which is also said to have the facility to be used abroad. But the real story behind this is not told to the user. When using credit card abroad, the user has to pay foreign currency transaction fee. It is better to use prepaid card instead of credit card abroad.
Pay total due
It is important for every person taking a credit card to understand that there are two types of due amounts, one is total due and the other is minimum due. If you pay only the minimum due, then the only benefit you will get is that your card will not be blocked, but you will have to pay more interest on the outstanding amount and this interest will be charged on the total amount. Therefore, while making credit card payments, always pay the total due.
Also read: Dhanteras 2024: This is the best time to buy gold and silver on Dhanteras, every detail including auspicious time, date, timing.
Buying unnecessary things through credit card can waste your money. In such a situation, the user should avoid paying for unnecessary expenses. Being careless about card security can result in fraud. Before taking the card, you should know all its conditions thoroughly, otherwise you may commit mistakes unknowingly. Due to which you may have to suffer heavy loss. By avoiding the above mentioned mistakes, you can keep your money safe and improve your financial condition.
