Are credit card dues getting you into debt trap? Here are some ways to avoid it | Photo credit: BCCL
- If this is your first time using a credit card, you should understand the terms and conditions of your card before swiping it
- If you are already trapped in debt, you may want to consider a balance transfer facility or transfer your contributions from one card to another.
New Delhi: Credit cards are typically used for making large purchases, but if used recklessly, they lead to a debt trap. But if used wisely, it helps meet financial need. Millennials today are very dependent on credit cards, which is why they find themselves in debt quite early in life.
Below are a few ways to avoid the accumulation of credit card dues and manage your unpaid amount on the card.
1. If this is your first time using a credit card, you should understand the terms and conditions of your card before swiping it. You will learn about information like the interest rate, minimum fees, maintenance fees, and other associated fees.
2. If you are already trapped in debt, you may want to consider a balance transfer facility or transfer your contributions from one card to another. This feature allows the credit card holder to transfer a partial credit card bill to another card. It allows the cardholder to use the benefits of different billing cycles and refund rules.
3. In order to avoid additional charges, late fees, interest rates charged on the invoice amount, one should pay the credit card invoice on or before the due date as this will help maintain a good credit rating.
4. If you are unable to repay the outstanding amount on your credit card, you can contact your bank and request that the amount be converted to EMI. Some banks may charge monthly interest to authorize this facility.
5. If you have more than one card, then you must pay off the debt of the card with the higher interest rate. This way, you will reduce your total interest expense.
6. Keep track of your monthly credit card statements as this will allow you to understand the various fees charged by the bank. There could also be fraudulent transactions from your card, where unscrupulous elements must have gained access to your credit card PIN or other identifying information.
7. We must limit the number of credit cards. People often hold multiple cards in order to take advantage of discounts, cashback offers, free airline miles, reward points, slot access, movie vouchers, and more. It is advisable to have a card that matches your interests. And maintain a disciplined approach while using it.