Top 5 Common Credit Card Mistakes at Online Shopping:
Manish, a young IT professional, living a carefree life like any other young people from employment. However, he decided to buy an apartment near his office for convenience. But to his surprise with big wins and no other loans, the home loan application was rejected because of bad credit CIBIL. How did it happen?
Manish realized that after talking with the credit manager that the loan was rejected as its credit card repayments were not regular.
Top 5 Common Credit Card Mistakes
1 . Many credit card holders commit a common mistake that puts them in the category of defaulters or unable to take maximum advantage of plastic cards. Let’s look at five common mistakes all credit card holders must avoid to ensure that their cards will never become a liability.
Opt for too many credit cards- A common mistake many people opt for multiple credit cards. Bank executives are smart to sell cards to all new employees and young employees. But do not fall for their words.
2 .Many newcomers to the business world would like to see many cards in their wallet. No question cards will make your life simpler with the benefit of buy now pay later. But by opting for multiple cards is the first step towards a mismanaged financial life and possible pitfalls of debt. Since credit cards offer decoy systems, those with multiple credit cards will find irresistible drag for various purchases and gradually fall deep in the endless cycle of high interest rates and debt. Even a single default on the credit card repayment could mean an output of the substantial interest and possible bad score CIBIL.
Do not check the monthly statement: You found a lot of emails from your banksand you ignore most of them. Some mails can automatically to your promotions folder (if you use g-mail). Of course, physical copies are oftenmounted on your desk without being opened.
3 . A common mistake of ignoring the monthly credit card statement or not checking the accounting can be a huge mistake that can cost you. In this world of online payments, there has been an increase in the number of credit card fraud. Ignoring the monthly bank statements, you can never know if your credit card security has been compromised or the card was used to make purchases without your approval. Also there are chances of getting erroneously billed, or collect additional fees by credit card company.
Making only the minimum payment: Many young singles with their money runs out near the end of the month, swipe to the remaining days and pay the minimum amount on date.Paying minimum fees due each month because the wait is a mistake current followed by many ignorant cardholders. By paying more than the stipulated minimum amount due for the month, the holder of the card not only reduces the outstanding balance, but also reduces the enormous effective charges on contributions.
4 .Not knowing your billing cycle: Many cardholders, especially those who have more than one card do not know their precise deadlines and makes a monthly payment on a fixed date.While most credit cards offer an interest free period of 30 to 40 days, it does not start from the day of purchase, but depending on the card billing cycle. But many credit card holders make the mistake of thinking the interest free period would begin at the time of purchase.
For example, if the billing period of the card begins 10th of each month, all purchases made by credit card on the 8th only result in a credit windowless two-day interest. It is therefore imperative for all credit card holders to know their credit card billing cycle and time their purchase accordingly to get the maximum benefit from their credit window without interest.
5 . Shopping for loyalty rewards points today are excellent marketing tools for each credit card company. Undoubtedly, it offers good deals for you if it also invites you to use your credit card frequently. Some users of credit cards, however, is carried away with the system of reward points and shop only to run the accumulation of points by purchasing products or services they are not necessarily immediately. Such a scenario may lead to loss of the monthly financial planning. Also before making any purchase of accumulation of loyalty points, make sure you know the expiration period points like most cards have an expiration period for loyalty points.