Day by day, using Credit Card became very popular among people. Because of easy money access, many people use credit cards for purchasing meterials. But, you should keep few things in mind before using a credit card randomly.
Using credit cards for small payments has become commonplace these days. Whether it’s paying a restaurant bill, making a travel booking, joining a gym, or subscribing to a video streaming service, almost everyone uses a credit card. But did you know that using a credit card for every expense isn’t always the right thing to do?
When you should stop using a credit card
For example, if you want to keep your credit utilization below 30%, using a credit card is not advisable. Similarly, if you tend to pay bills after their due date, relying too heavily on credit cards could be detrimental. Below are some situations when you should avoid using a credit card.
Keep these things in mind
According to experts, you shouldn’t spend more than 30% of your credit card’s total limit. If you’re close to exhausting your credit limit, stop using your credit card. If your total credit limit is ₹5 lakh and you’ve already spent ₹4.5 lakh, it’s best to pay off the outstanding balance first and then use the card. Some people withdraw cash from their credit cards through ATMs. Others use third-party apps to withdraw money from their credit cards. This practice is not safe and can result in significant charges. If you don’t have the capacity to pay your entire credit card bill at once, avoid using it.
It’s better to save for a few months and then spend. Paying only the minimum due is also not a good idea, as this increases the interest burden. If you are using a credit card for a big expense without thinking about how to repay it, then it is a wrong step. Never make credit card payments on suspicious or less-reliable websites. Such sites are prone to fraud.