The number of individuals who use a Credit Card has gone up significantly. Getting this card is also easy these days. However, you need to know how to make the most of it. Let us know more about a Credit Card and consider the various things you need to be mindful of when using it.
Overview of a Credit Card
A Credit Card is a financial tool. It is offered with a pre-loaded amount that lets you make purchases and pay for them later. When using this financial tool, you borrow funds from the Credit Card company until you repay the sum. Various banks in India offer Credit Cards. However, the payment gateway is typically offered by MasterCard, RuPay, and Visa.
Things to be mindful of when using a Credit Card
When using a Credit Card, you need to be a responsible user. Here are a few things you need to remember when using this financial tool:
- Avoid cash withdrawals
If you encounter a financial emergency and do not have enough money, you can withdraw cash using your Credit Card. Otherwise, you should avoid withdrawing cash using this card. Withdrawing money is not recommended since you must pay withdrawal charges added to the interest charges. Consequently, it increases your outstanding bill amount.
- Utilise the interest-free period
Generally, banks offer an interest-free period to users of Credit Cards. For example, your bank may allow you to take advantage of an interest-free of approximately 45 days. Consequently, you can purchase anything during this period using your Credit Card without incurring any interest charges. However, you must ensure you pay your bill on the due date.
- Know the purpose
Before you make a Credit Card application, decide its purpose. This way, you can use it wisely and enjoy its various benefits.
- Do not delay Credit Card dues
Do not delay or postpone your Credit Card bill payment. Rolling dues may result in you landing in a debt trap. The interest will also increase when you don’t pay your dues. Besides, you will face late payment charges from the bank. However, when you pay your Credit Card bill on time and in full, you do not have to worry about the high interest rates associated with it.
- Pay attention to the statement
If you pay your Credit Card bill without considering your statement, you may pay for charges you do not have to. Hence, check the statement and consider if there are any additional fees or charges that the bank has imposed.
Conclusion
A Credit Card offers various benefits, such as helping you build a line of credit and giving you easy access to credit. However, you should use this financial tool responsibly and be mindful of the crucial things when using it.
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