5 Credit Card Traps you should avoid

Many cardholders either abuse or misuse their credit cards to pay their auto loans or other instant types of loans. Usually, many cardholders use the cards to their limit and finally realise that they don’t have sufficient funds to pay their current dues.

To avoid such types of situations cardholders should be wary of the following credit card traps:

  1. Frequent usage: Since there is no need of filling out any forms for its use many cardholders are tempted to use it frequently and therefore are consumed by impulsive buying. In order to get over this, you leave your card behind and carry some cash to tide over the situation.
  2. Note the payment schedules and cut-offs: A schedule is a deadline given to the cardholder to pay their dues without any additional surcharges and a cut off is the cap set by the company for credit usage in a particular payment cycle.
  3. Spending habits are promoted:  Possessing a credit card and using it when required is considered cool and a privilege. In fact, such notions can lead into debt or credit traps and it may take a while to come out of it.
  4. Unnecessary dependence: Actually it is very stressing to own a credit card and more so if it is more than one. Monitoring and paying the dues becomes a tedious task because different credit companies follow different procedures. Don’t rely on your credit cards for day to day expenses.
  5. Do not avail promotion offers: If you don’t need any items don’t use the promotion offers. These are the ways you get into a credit trap. Refrain from buying unnecessary items.

Credit cards are an excellent tool to pay with the advance cash feature but they need to be used sparingly only when required in emergencies otherwise there is a chance you might fall into a debt trap.

Updated: November 23, 2016 — 7:04 pm

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