Credit cards charges are generally high and they also have high interest rates (around 35-40% p.a.). Even loans did not have this high rate of interest. To avoid unnecessary credit card charges one needs to take necessary precautions.
Precaution And Tips To Avoid Unnecessary Credit Card Charges:
- Always pay credit card bill regularly and in full amount to avoid any penalty. If you pay your credit card bill in full, your interest free period will start a fresh on new purchase. And Only paying minimum amount due is not enough as high interest is charged on leftover money.
- Let’s understand it with an example:
- Raghav credit card bill is around $1000 and the minimum amount due issued by bank is $100. So, even if you paid minimum amount due, you still need to pay interest on leftover money which is around $900.
- Credit cards has more interest rate even higher them most type of loans. If you have to pay both credit card bill and loan payments then you can delay your loan payments. Always pay credit card bill first as in credit card more interest is charged which is around 36-40%. Even personal loan have rate of interest nearly around 18-20%..
- Even most Home loan have less interest rate then credit cards. One can even take Top up loans on their home loan to pay credit card debt. Loans will longer your tenure which will help you to pay your credit card bill.
- Avoid using credit cards to take cash out of ATM as interest are high around 36-40% p.a. right from the date of withdrawal. Only withdraw through ATM using credit cards in case of emergency.
- Debt of credit cards can be convert into EMI loan with effective interest rate around 1-2% p.m. Here effective interest rate of this EMI is quite higher than most Personal and Home loans. Some Banks do offer 0% interest EMI but mostly while shopping at MRP price or less discount.
- It is recommended to not keep more than 1-2 credit cards, even one credit card for Individual is sufficient. As some credit cards it is mandatory to do minimum transaction after certain interval. It might confuse you if kept multiple credit cards.
- Your credit limit increases if you pay bill on time and use card regularly. if your salary increase then can also ask for increase in credit limit. You only need to provide proof of income to your bank.
- Cash withdrawal limit. Make sure to check withdrawal limit of your credit. If you withdraw beyond your limit, you will need to pay unnecessary charges. It is advisable to only spend as per your payment capacity. Definitely not above your credit limit. This will surely boost your credit score. Credit score is very important to take benefits of various credit facilities like Overdraft loans.
- If your credit card is lost or stolen than misuse of this card is possible as in International transaction while using credit cards there is no OTP sent to your Registered mobile number . So anyone can use it to do international transactions. So, whenever your credit card is lost then you can block it through Internet banking at your Bank’s official website or just call to bank’s customer care number and tell them to block your credit card.
- In case of delay in credit card bill and or any default in transaction can adversely affect your credit score. It is very important to maintain and improve your credit score.
Ways To Pay Credit Card Bill:
- Auto debit facility:deduct money periodically from bank account to pay credit card bill.
- Pay through Cheque: To pay credit bill drop a cheque at drop box at atm and branch.
- NEFT: can also pay bill through NEFT , make sure to add credit card number as beneficiary account number.
- cash payment: can pay bill through cash by just visiting bank branch.
- Visa money transfer: pay credit card bill securely through other bank account.
- Ipay: pay bill from different bank account directly to your credit card.