Avoid These Credit Card Mistakes In The Middle Of This Lockdown


Avoid These Credit Card Mistakes In The Middle Of This Lockdown


  • If you have the means to pay your credit card bill, refrain from opting for the moratorium
  • Keep checking your credit card bill regularly during lockdown and pay it on time
  • Don’t use your card for luxury items and try to spend only for the essentials

New Delhi: Credit cards have become extremely popular among Indians over the past couple of years. The urban population in particular has become quite comfortable with card transactions. Credit cards are a great way to make transactions quick and easy. With credit cards, one can have quick access to funds in an emergency.

However, like all other aspects of people’s lives, the way credit cards are used must also be reviewed during this period of foreclosure. Since people are also trying to avoid cash transactions in the midst of this pandemic, the use of credit cards has become a bit popular.

Here are some credit card mistakes you should avoid while in lockdown:

1. Moratorium on loans: In March, the Reserve Bank of India (RBI) announced a three-month moratorium on the repayment of all term loans due between March 1, 2020 and May 31, 2020. This moratorium also applies to credit card bills . If you opt for this moratorium on your credit card bill, you will not be required to pay anything during the three month period and the bank will not charge any late fees.

However, before you opt for this, you should understand that banks will continue to charge interest as usual on the unpaid amount and if you make a new purchase during this moratorium period, interest will start accruing immediately. This means that at the end of it, you will end up with a hefty bill which will be difficult to pay. So, if you can afford to pay your credit card bill, avoid going into the moratorium.

2. Ignore payment of the invoice: If you’re one of those people who doesn’t use their card nearly as much as they normally would, it could make you forget about paying the bill. You might be tempted to ignore your bill because it might be a negligible amount. However, this is a big mistake that you should avoid at all costs.

Delaying bill payment by credit card will increase your liability as the card will continue to earn monthly interest at the rate of 3-4% on the unpaid amount, as well as on new purchases. Since the interest rate on your credit card bill can be quite high, postponing the bill even for a few months can cost you so much money. So, keep checking your credit card bill regularly during the lockdown and pay it on time.

3. Unnecessary purchases: As the lockdown has eased in several cities across the country, stores are reopening and e-commerce portals are starting to supply non-essential items as well. In this situation, you will probably feel the urge to shop and you might end up buying things that you don’t even need. These reckless spending using credit cards will increase your spending and you will end up with a huge bill to pay.

People are losing their jobs and facing pay cuts due to COVID-19 and God forbid if this happens to you you will have to dip into your savings to foot the bill and it shakes your savings. Remember that any unforeseen expense can seriously damage your finances. Make sure you don’t get carried away and abuse the credit card. Don’t use your card for luxury items and try to spend only for the essentials like medical bills, utility bills, insurance premiums, basic necessities, etc.

4. Expiration of reward points: All credit card issuers today offer loyalty points to their customers. While some banks offer one point for every Rs 100 spent, and the value of one point could be 20 to 40 paise, there are other companies that offer two points for every Rs 100 spent. A pint of reward from some companies is also equal to Re 1.

While you may not be making large purchases with your card lately, the point accumulation may not be substantial. However, if you have accumulated points, you need to know when they will expire. Keep track of your reward points and make sure they don’t expire. If you have a rewards repository, be sure to use those points for essential expenses and save money.


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