What are the Do’s and Don’ts of using Credit Card?

In this 21st century, it turned out that a Credit Card is so many people’s personal favorite financial product. A Credit Card either can be a blessing or a curse depending on how you are using it. A credit card can be a powerful tool to work on your credit score. From the rewards program of a credit card, you can be benefited in so many ways. Those credit card rewards program offers amazing cash backs, rewards points, travel offers, credit deals, and this list go on. So here we are giving some do’s and don’ts in Credit Card.

  • Don’t carry it out– It is very good to have less-cash in your wallet but that does not mean you should carry your credit card everywhere.  If you are carrying your credit in every minute with you that means you’re much more likely to use it (and overuse it at that). Credit Card is for emergency use so if you are overusing this, it means you are overspending.
  • Check your Credit Score once in a year– Credit Score stands for your repayment ability in a loan or credit card. So your credit card providers always share your details of repayment with several credit agencies like CIBIL Trans Union, Equifax etc, who rates your credit card from 300-900. It is good to buy your credit score and complete report in every year once, so you can keep a track on your credit history. Your credit score gives an idea to the lender how likely you are to pay back loan or credit cards repayments. If your credit score is high there is a much more chance of your loan will be approved. If you know your credit score you can always work to improve it. 
  • Do keep an eye on your transactions–  Each one should always keep an eye on their transactions if your credit card provider sent an e-mail alert or an SMS alert on your phone read it carefully do not just ignore it. Also, keep practice to read and verify your monthly credit card statement. Remember all your purchase you made by credit card and if you can’t keep the recipes of those purchases and verify it, whenever you saw any unauthorized transaction in your card just call the customer care and inform it.
  • Card Number– You should always remember your card number in any case if you lost it somewhere you can call the customer service and can inform that you have lost it and also if you are shopping online you don’t need to take your credit card every time to copy the number. If you use only one credit card this will be really helpful for you.
  • Pay the bill– The most important thing about credit card is you should pay your Credit Card bill timely if you do not make your payment timely your credit score can be low. After the due dates, the credit card providers charge an interest which can be high as 48% yearly. Remembering this point does not ever miss your credit card payment on time.
  • Do not go for credit cards which charge annual fees-  There are so many credit card companies who charge annual fees for their cards this means you have to pay an extra charge every year on that date you have first opened your credit card account. So, if you are already carrying a balance you have to pay more to your card provider which will cost you more money. So, go for those credits that do not charge annual fees for your credit card.
  • “Kite Payments”-a big no!- If you don’t know what is the kiting process is you are on the safe side. There are so many borrowers who have too many credit cards so when they are not able to pay one they take money from another credit card provider and pay the other provider from whom he had borrowed, then he did the same for the following month. Kitting is illegal and also a federal offense.
  • Use Credit Card for what you can afford – Many credit card users buy items that they are not unable to pay with their cash. It means they are overspending. If you are unable to pay for something, don’t go for that. You have to pay your money at the end of the month or the balance will be carried forward and you have to pay it even with interest.
  • Don’t use cash advantage-  Do not take cash from ATM by your credit card. The cost is so high for withdrawing cash from your Credit Card. The interest rate on cash withdrawal is typically upwards of 25% and also on the top of the fee with 3% of the amount you withdraw. You can’t avoid the interest even if you clear the each month’s full balance.
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