Credit card is plastic money issued by banks and credit card companies to customers. Credit card comes with various advantages and it’s a boon for cardholders. It serves as quick money which allows users spend now and pay later. With the help of a credit card, users can make high-value purchases and convert them into easy EMI's. You can avail various discounts and offers using credit cards.
Credit cards are very useful but at the same time, they have to be used carefully, or there are chances of you landing in the debt trap. These cards can be misused by fraudsters. In this blog, we will give you certain guidelines which credit card holders must follow to use credit card safely.
1. Never share your card details
To keep your credit card safe from fraudsters, you must never share your card number, CVV, expiry date and OTP with anyone. You must not share these details even if someone calls, claiming to be from the bank.
2. Update your contact number and email id
To stay updated on each transaction that takes place with your credit card, you must update your current contact number and email ID with the credit card issuer.
3. Check your credit card statement carefully
You must check your credit card statement carefully before paying off the bill. In case you find any suspicious transactions, report them to the bank as soon as possible.
4. Pay your credit card bill on time
If you want to be a smart credit card user, pay your credit card bills on time. If you do not pay your credit card bills on time, you will be charged a penalty and interest on the outstanding amount due. Not paying credit card bills on time impacts credit score.
5. Never pay only minimum amount due
To escape from late payment charges, many people just pay the minimum amount due. Minimum amount due is the minimum amount cardholders have to pay within the due date. Normally, this amount will be 3-5% of the outstanding dues. By paying this amount, cardholders can escape the late payment charges, but they will have to pay interest on the outstanding dues. As we all know credit card interest rate is around 24-36% each year, which makes it a high interest loan. When there is an outstanding balance on credit card, there will be no interest-free period.
6. Never withdraw cash using a credit card
Withdrawing cash at ATMs using a credit card is a very bad habit. You will be charged cash advance fees for withdrawing cash using your credit card. This fee will be around 2.5% of the amount withdrawn and is subject to a minimum charge of Rs 300 to Rs 500. When you withdraw cash using your credit card, you will be charged interest from the date of withdrawal.
7. Never exceed your credit limit
Exceeding credit limit has a bad impact on your credit score, so it is advisable to keep credit utilization as low as possible.
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