Credit Card- Watch out for the Common Mistakes

Good Credit card management is not everyone’s cup of tea. But, while using this plastic money, care and caution hold utmost importance. Wise handling of monetary matters always acts a good opportunity for credit card holders, but one needs to be wary of certain specific points. Let’s see what these vital points are.

Your Limit is only As much as you SHOULD spend
Generally credit card companies today have been lavish in giving credit limits to its customers. However, as a customer, you need to keep in mind that Credit Card spending is after all a loan which you need to repay on a later date. So, spend only as much as you can repay. Do not be trapped in this spending mania due to higher credit card limits. It is better to set a limit per month for one’s own expenses.

The Myth of “Cash Limits” As we all know, the credit cards have a cash withdrawal limit attached, where a person can withdraw the amount. But, one needs to be very watchful on this as the interest rate is much higher than the normal bank loans. Beware and use this limit only and only if it is extremely necessary.

The Trap of “Minimum Payments”
This is something which creates highest problems. A layman would be misguided by this term as actually this “Minimum Payment” is meant only for not freezing the card from further usage. However, the reality is hard. If you pay only the minimum amount, you would be heavily charged on the amount of the bill unpaid on the due date. The failure to make full payment results in mounting debt. It is advisable to avail a direct debit facility for the minimum payment every month and pay the additional amount due via a cheque or online balance transfer of funds.

Late Payment – The Way to Catastrophe
Direct Debit arrangements these days have given people a relief from the disaster of late payments. One can face real problems due to forgetfulness or busy schedule. Late fees or late payment charges are too high for anyone to bear. And it is better not to bring a situation where one needs to bear this. Pay additional attention to the payment dates and try not to linger on the payment till the last payment date. Try paying as soon as the funds are available with you.

Keep your receipts
Judicious use of credit cards is necessary. It is vital to keep the credit card slips safely to tally them with credit card statements. Don’t be careless with such receipts as these have details of your card which could bring additional risk to you, if it goes in wrong hands.All these and much more, when you are on the way to enjoying additional funds available through credit card!

• Check your statements timely and report any discrepancy as soon as possible.
• Do not hastily select the associated products with credit cards which normally carry the “free or discounted” tag as the reality may be different.
• Be extra alert about the security of the PIN numbers.
One who can handle funds judiciously has full right to use this plastic money. So, be wary and enjoy the advantages.