Don’t Do These 5 Things With Your Credit Card

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    Don't Do These 5 Things With Your Credit Card
    Don't Do These 5 Things With Your Credit Card

    Swipe, dip, or tap is the new payment mantra.  

    Indians used their credit cards for almost 211 million point-of-sale credit card transactions in December 2021. This number is huge. 

    Credit card payments are accepted almost everywhere today, from hospitals, airlines, shopping stores, and movie theatres to salons and online purchases.

    One of the reasons why plastic money is so popular is that credit cards have a universal sizing, governed by the ISO 7810 international standard. It makes it possible for credit cardholders to use a single card for contactless and cashless payments anywhere across the world. 

    Credit cards let you make purchases beyond what your pocket allows, and you can pay this money as a lump sum amount or in easy installments anytime before the billing cycle.

    However, just like any other payment method, credit cards also need to be used with caution. Today we are going to focus on the top 5 things you should never do with your credit card.

    Top 5 Things You Should Never Do With Your Credit Card 

    Your little plastic card can do you a lot of damage if not used responsibly. Avoid these five things to save your precious money while using a credit card:

    • Making only minimum payments: Credit cardholders have the option of making only the minimum payment on their credit card bills. Card issuers give this facility to ease out heavy payments for cardholders. However, it can do more harm than good. Cardholders who fall into a habit of making only the minimum payments on their credit, end up accumulating interest on the balance payments. It leads them to ultimately pay more money to the card issuer and would take them more time to pay off the debt.

    Do not make only the minimum payment on your credit card bill and pay as much as you can every month. Aim at increasing the credit card payment with every billing cycle to pay off the balance sooner and at a lower interest rate. 

    • Skipping credit card bill payments: While credit card issuers offer you an interest-free debt for a fixed time, they charge you a fee if you skip your payment. If you are unable to pay the entire bill amount and skip paying even the minimum payment, the consequences will be unpleasant. The card issuer will charge you a high fee and may even report the incident to the credit bureaus, putting a dent in your credit history. Additionally, the card issuer may revoke the rewards and benefits offered on your credit card if the bills are not paid for long. 

    To avoid late payments, set up automatic payments and notifications for the credit card bills and get into the habit of paying a few days before the last date. 

    • Maxing out the credit card limit: Every credit card comes with a credit limit. Cardholders have the freedom to use the card to make payments up to the credit limit on the card. If the cardholder uses the credit card balance beyond 30% of the credit limit, it can bring down his credit score. If the cardholder exhausts his credit limit and tries to make a payment using the card, his payment will be declined. 

    Avoid relying solely on the credit card for emergency purposes, and in case you have to max out the credit limit, pay it back as soon as possible. 

    • Lending out your credit card: Under no circumstances should a credit cardholder share his card information. This information includes the card number, PIN, and the expiry date on the card. The cardholder is responsible for any purchase made on the card, even if it has been made by a friend or a relative who promised to pay the cardholder later but defaulted. 

    Refrain from sharing credit card details with anyone and be extra cautious while using the card in public, lest anyone notes your PIN and other information. 

    • Late reporting for lost or stolen credit cards: In case of the mishappening of the card getting lost or stolen, be prompt with reporting the same. If the cardholder reports the missing card before the thief has a chance to charge up the account, he will not have any liability for the charges. The longer the reporting takes, the more time the thief will have to make purchases using the card. 

    Report the lost or stolen card immediately to prevent its misuse and limit your liability for fraudulent charges on the credit card. 

    A credit card is a great payment tool if used responsibly. Avoid being casual on credit card purchases and do not get into the habit of overspending. Remember, you will have to pay for everything you purchase. With a few precautions, credit cardholders can avoid debts on their cards and use it as a tool for financial freedom.

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