Follow these steps to ensure that you are using your credit card rather than the other way round!
Read the Card Holder Agreement
Do not sign on that dotted line unless you read the terms & conditions, features, penalties. This will ensure that you do not discover any surprise fees.
Use Cash or Debit Cards
Reach for cash or a debit card for day-to-day purchases. Using credit cards for regular purchases will increase your dependency on that card, and you might also end up over borrowing.
Avoid Impulsive Purchases
Do not use credit cards to live beyond your means. It can impact your budget, divert you from your goals and also potentially result in a debt trap for you.
Know Your Payment Due Dates
Keep track of your credit card due dates. Missing the payment due date could cost you interest and most importantly show up as late payments on your Credit Report.
Never Carry a Balance
Credit cards come with high interest rates of 35-40% p.a. If you are making minimum payments then you would not only end up taking more time to pay off the debt completely but also pay much more than borrowed.
Do Not Use Your Credit Card for Cash Advances
It is the most costly way of getting cash! Cash advances do not allow for Grace period and this could be the first step leading towards debt trap.
Here is an easy and quick way to find out if your credit card has been using you. If your answer to any one of these questions is “yes” then your credit card is taking control over you.
- Are you cash stretched?
- Are you making minimum payments?
- Are you over dependent on your credit card?
Answer them and find out for yourselves!