First of all, let’s try to understand that what is a credit card and from where do you get it from? It is a card usually issued by the banks or financial institutions. It is an arrangement through which you buy any product or service now but agree to do the repayment of that amount after a certain period of time. No interest is charged if the repayment is done within specified time limit, however if repayment is done beyond that period, it does incur interest charges. These cards are usually issued to the person who has good credit history.
Doing shopping with credit card has changed shopping experience entirely. The reason behind this is doing shopping with credit makes the transaction very smooth and you don’t have to go through the hassles of cash payments. You don’t have to worry about how much cash you are holding in your wallet, secure payment by OTP or PIN etc. Now Money Dial would suggest you some golden rules, which a credit card holder must always follow.
7 Golden Rules for Credit Card holders :
Avoid Late Payment:
It is always advisable to the credit card holders that never develop the habit of doing late payment. In credit cards, the penalties are very high, there are case were the penalties has risen to 40% on late payment plus this would badly affect your CIBIL score, which in return will deteriorate your credit score, thereby hampering your chances of getting any loans, if you plan to take in near future.
Avoid Minimum Payment Habit:
Always try to do the full payment of the credit card monthly bill. There are some cases where people developed the habit to do minimum payment of your credit card bill. This habit would badly affect your financial health as in long run; you would end up to a situation where you have to pay huge interest on the pending amount.
Avoid taking too many cards:
If you are having too many cards then you might develop the habit to do unnecessary shopping, without consider what is your total monthly income. If the amount of shopping is more than the monthly income due to too many cards, then you would face financial problems. This can be like moving toward debt trap as you would borrow money from friend/relative to make the payment.
Read terms and condition:
Always read terms and conditions before using any new credit card. The reason why Money Dial wants to raise awareness around terms & conditions is because every credit card company has different terms and condition.
Monitor your monthly statement:
Monitor your monthly statement of your credit card. By doing this you can find out, if there is an unfamiliar transaction done on your card.
Cash from Card:
Try to avoid developing the habit of using credit card as debit card to withdraw the cash. Usually the credit card company allows you to do cash withdrawal. But if you are doing cash withdrawal, you would face heavy charges, in some cases the interest rate on such cash withdrawal could be as high as 30% to 40%.