With an astonishing number of benefits packed into a rectangular card, the credit card has truly become a modern wonder. When used wisely, it can be a versatile financial tool to elevate your lifestyle. Poor credit card habits, on the other hand, can be gravely detrimental to your financial health. Here are some tips and tricks to avoid the common pitfalls of credit card misuse.
Sometimes people tend to overspend with their credit cards because of a higher credit limit. Be judicious with your expenses. A good rule of thumb is to never exceed half the credit limit. It’s always advisable to keep a close eye on expenses, so you don’t unwittingly risk reaching your limit.
Rewards are inarguably the unrivalled incentive of credit cards. Read up on how your reward system works and how you can best redeem points. With most of the Credit Cards, you get instant issuance of reward points and easy redemption within the app. Talk about efficiency!
You can get the most out of your credit cards if you make timely payments. Payment delays can incur unwanted late fees that could multiply and drag you down. Setting up automatic monthly payments before the due date can give you peace of mind. It’s now easier than ever.
A lot of credit cards have hidden fees, extra charges, even astronomical annual fees. Opt for a credit card that gives you the greatest number of rewards without any of these hefty upfront or obscure charges.
- Don’t Apply for Too Many Cards
People often get lured into signing up for more credit cards than they need, even when they haven’t cleared their debt on previous ones. Stick to a few that better suit your spending habits so that you don’t lose control of your credit card expenses.
- Don’t Pay only the Minimum
Paying just the minimum every month will keep your account temporarily safe, but you will accrue interest on the unpaid balance and the debt inadvertently will creep up on you.
The bottom line? Using a credit card wisely can exponentially upgrade your everyday life. Just be aware of the traps, and you can swipe your way to healthy financial stability.
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Disclaimer: The article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of The South Indian Bank Ltd. or its employees. The South Indian Bank Ltd and/or the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial/non-financial decisions based on the contents and information’s in the blog article. Please consult your financial advisor or the respective field expert before making any decisions.