The use of credit cards is expanding all the time. Credit cards are preferred by most people, especially for online bill payments and shopping. However, it is important to remember that using a credit card is a form of debt that must be returned later. As a result, you should be cautious when using your credit card. Today, we’ll discuss some of the situations in which credit cards should be avoided.
Withdraw Money from an ATM
If you believe that withdrawing cash from a credit card through an ATM is a fantastic convenience, reconsider. When you withdraw cash from an ATM using a credit card, you do not have time to pay for it. Interest begins to accrue as soon as the money is withdrawn. The monthly interest rate might range from 2.5 to 3.5 percent. On top of that, you’ll have to pay a fixed transaction tax.
International Business Deal
You must pay foreign currency transaction fees if you use a credit card outside of the United States. Fluctuations in the currency rate, on the other hand, have an impact. If you don’t want to carry cash with you while you travel, a prepaid card might be used instead of a credit card.
Maximum Credit Limit
When using a credit card, keep in mind the credit limit. If you go above your spending limit, the corporation will charge you. Using more than 30% of your credit limit has a negative impact on your CIBIL score.
Option with the Earliest Deadline
In a credit card bill, there are two sorts of amounts due: Total Amount Due and Minimum Amount Due. The minimum amount owed requires less money to be paid. If you choose this option, keep in mind that you will be charged a significant amount of interest. The total sum is subject to interest. As a result, while making a payment, select the Total Amount Due option.
Transfer of a Balance
Make good use of the balance transfer option. You can pay the bills of any other credit card using a balance transfer from one of your credit cards. However, you will have to pay some interest as well. Never transfer balances in such a way that you pay one card’s bill with another’s, then the third with the second, and the third with the fourth. Your CIBIL score will suffer as a result of this.