credit card mistakes and how to avoid
1. Never pay the minimum amount: Instead of carrying a balance from one month to another, always try to pay off your credit card in full or pay as much as you can every month. Moreover, it makes more sense to first pay off your credit card and save money in interest charges later.
2. Don't make payments when you can't afford it: You should swipe the credit card only if you can afford to pay it off in full on time when your statement comes or you will have to pay heavy interest penalties on the remaining balance.
3. Don't get influenced by advertisements: If you have applied for card just because you will get cash back bonus or the extra miles earned by signing up the card, this could be a wrong step. Don't get influenced by any advertisements or phone calls and decide why you need this card and then go for it.
4. Do not apply for too many cards: You should not apply for too many credit cards at one go as this could create a red flag on your credit report and make you look like a risky customer. This can further lower your credit score.
5. Never exceed your credit limit: Do not exceed your credit limit as this can hurt your credit score. Always keep in mind that debt utilization ratio is one of the major factors in determining your credit score. Also, do not carry a balance of over 30% of your credit limit.
6. Do not pay the bill without reviewing your statement: Many people pay the bill without reviewing it which is an incorrect practice. Card fraud is very common these days, so one should review the credit card statement carefully month to ensure everything is correct and your payments are posted on time and in the correct amount.
7. Never ignore the fine print: It very important to understand the terms and conditions of your card. You should know details of the promotional interest rates or the limits on the points you can earn. Though they are boring, but you need to know them.
2. Don't make payments when you can't afford it: You should swipe the credit card only if you can afford to pay it off in full on time when your statement comes or you will have to pay heavy interest penalties on the remaining balance.
3. Don't get influenced by advertisements: If you have applied for card just because you will get cash back bonus or the extra miles earned by signing up the card, this could be a wrong step. Don't get influenced by any advertisements or phone calls and decide why you need this card and then go for it.
4. Do not apply for too many cards: You should not apply for too many credit cards at one go as this could create a red flag on your credit report and make you look like a risky customer. This can further lower your credit score.
5. Never exceed your credit limit: Do not exceed your credit limit as this can hurt your credit score. Always keep in mind that debt utilization ratio is one of the major factors in determining your credit score. Also, do not carry a balance of over 30% of your credit limit.
6. Do not pay the bill without reviewing your statement: Many people pay the bill without reviewing it which is an incorrect practice. Card fraud is very common these days, so one should review the credit card statement carefully month to ensure everything is correct and your payments are posted on time and in the correct amount.
7. Never ignore the fine print: It very important to understand the terms and conditions of your card. You should know details of the promotional interest rates or the limits on the points you can earn. Though they are boring, but you need to know them.
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#sh. Jayaraman Raju question was not about the charge but why should the credit card company charge anything. You are correct that they do not ask for interest but the charge is expected to cover the interest on loan given indirectly to the parchaser.
Feb 03
I think that there is a mix up relating to levy to the vendor and levy to the card holder; if the bank is charging the vendor as a payment towards the interest charge on the delay on reimbursement of the amount of purchase made, by the customer, then it is a hidden charge from the point of view of the customer- and is unlawful; here the point under discussion is the levy charged to the vendor/shop keeper; that is only a service charge and not an interest for delayed payment by the customer; for this same reason, many small establishments refuse to accept credit card and putting the customers to great difficulty; even the sagar hospital@ banashankari, informed us that if we want to pay the hospital bill ( Rs 75000) by credit card then we hv to pay an additional 2.5% of the sum towards the bank charges; we paid the additional charge; the govt policies speak of something else but the govt actions are something else;;;; the govt wants to please the bankers and the banking public at the same time; and in the process draw the benefits from both the sectors; it is like the fable of two cats fighting over a pancake and the monkey takes whole of it, in the guise of settling the issue between the fighting cats;;;;;;
Feb 03
Dear saxena, indirectly drove home the point validated by Mr.Jayaraman Raju. By credit cards it is a big business to banks & the vendors, hence the suggestion to stop this levy.
Feb 03
#Sh. Jayaraman Raju The credit card company is supposed to credit the seller immediately but they collect the payment from the purchaser after several days. This levy is the interest on loan to the purchaser during this period (plus a lot more, of course.) If you pay in full on the due date, purchaser does not pay any interest.
Feb 03
Interesting point to be noted is that when Credit Card was introduced in India the banks hailed the importance of the use of cards and in favour of introduction of the cards, inter alia, one point was highlighted, that the cards obviate the use of paper currency and since printing currency notes is expensive, the govt/RBI would save a lot in printing cost as the use of currency notes is expected to go down considerably; if that was one of the objectives, then why are the banks charging the vendor any levy? basically the transaction is a fund transfer and keeping in mind the objective of discouraging use of currency notes, the transaction should not attract any charges; Probably the forum should take it up with the banks thru the finance ministry; come on let us take it forward!!!
Feb 03
