Top 5 Must Know Features To Avoid Credit Card Debt Trap
Do you like to use credit card most of the time you shop online or offline like me? Then I am sure you are well aware about the benefits of having a credit card. But do you know that one can easily get into a massive debt trap in case use any of the credit card features I have mentioned below without proper knowledge?
In this article I will share some key highlights of every credit card, which may attract you a lot but if you don’t have proper knowledge of how to use them, then you may end up having a huge debt. Let’s explore them one by one.
5 Credit Card Features To Avoid Debt Trap
You might be thinking that why these features are there where there is a risk of debt trap? Actually these features are there to provide various relaxation or instant benefit to customers with some terms. Now, when you are not able to follow the terms, you will be charged and that’s where banks are making money through their credit cards.
Min Amount Due
This is one of the most miss-understood feature of credit card bill. I have already shared a detailed article with example to understand how minimum amount due feature works for credit card. Be aware and try to clear the credit card bill within due date only if you have money.
Many people think that a credit card is the best alternative to ATM card. Yes, you can withdraw cash and enjoy your
personal need, but do you know cash withdrawal using credit card is nothing but a kind of personal loan with very high interest rate only. Make sure you have gone through every single details and how much interest on credit card cash withdrawal you have to pay to stay away from unnecessary situations in coming days.
Buy anything on credit card EMI
You might have attracted to zero charges EMI scheme using some credit card while shopping online. Recently
there were many online shopping sale going online like Flipkart Big Billion Day Sale, Amazon great Indian Sale, Snapdeal Unbox Sale, Paytm Sunday Bazaar etc where I have noticed various EMI schemes on products. Although it is good idea to buy a high cost product with EMI scheme, but do you know that there is a processing fee and every time you go for a purchase you have to pay that fee. Other than that just check whether there is any additional interest charges or not.
Loan against Credit card
If you need a personal loan then just check whether it is good to take a loan against credit card or not. Generally there is no such difference between a personal loan or a loan against credit card. May be the process will be little smooth for credit card, but it may attract high interest as well.
High Credit Limit
Many people think that having high credit limit is always good. It is true that having a high credit limit credit card will give you a relaxation of having an emergency fund with you always. But if you don’t have control in spending, then this is not a good feature for you. In that case you may easily fall into debt trap by spending too much as your credit card is allowing without realizing your repayment capacity.
So, are you afraid of applying for a new credit card after reading this? Then you got me wrong. Because the purpose of this article is to spread about the awareness and knowledge about various features of credit card to stay away from debt trap. If you have no choice, then you can easily use these features and that’s why they have been provided only.
Share your thoughts and experiences if any by writing a simple comment below.