Read this before using your credit card!

Hey,

Are you a salaried employee? or a businessman?

It is a high probability that you use your credit card every time to avail perks such as 50 days interest-free loan or to build a high credit score to avail lower interest rates for upcoming loans.

But your bank is hiding some secrets from you

In this newsletter, we are discussing-

1. How to prevent from falling into a bank’s trap

2. How to improve credit card security

3. Bonus tips to maximize the advantages of your credit card

Let’s get started,

While the perks of a credit card are highly marketed by the banks, Here are a few services that are actually a trap.

1. Higher credit limit – Banks provide a credit limit higher than your salary so that you spend more money every month and are unable to pay your card bills. Thus, end up paying interest to the bank

2. Minimum due payment – Even if you pay the minimum due amount banks charge interest on the remaining amount

3. Credit Card EMI – Credit card EMI might look like a good service for paying heavy bills but it implies an interest rate of 30-36%, twice as compared to a personal loan.

How to prevent from falling into the trap

Tip 1- Fix the spending limit on the tap or swipe feature using your online banking portal. This is the most important tip to save yourself from the traps of overspending.

Tip 2- Limit your credit utilization up to 30% of your credit limit i.e. Do not use more than 1/3rd amount of your credit limit. In worst scenarios make sure to utilize only up to 2/3rd of your credit limit. Plan accordingly.

Tip 3- Turn on the autopay feature for your credit card. This feature allows you to pay your credit card bills automatically through your bank account. Hence it allows you to pay your credit card bills on time.

How to improve credit card security

Tip 1- Disable the overseas payment feature when not needed. Most overseas websites do not send an OTP before deducting money. Many people are scammed in this way.

Tip 2- Turn on two-factor authorization for extra safety.

Tip 3– If your card has a tap feature, use NFC proof wallet to save yourself from accidental payment.

Tip 4- In case, your card gets misplaced or stolen or a fraud. Report to your bank within 48 hours. You can report crimes on 1930.

Time for Bonus Tips

Tip 1- Plan your purchases just after the due date of your last payment cycle. This allows you to to secure a repayment period of almost 45 days.

Tip 2- If you are paying credit card EMI or missed any of your last payment, pay off your debts by borrowing money through personal/consumer loan as they carge lower interest rate of 12-18% as compared to credit cards.