How to deal with evils of Credit Cards and manage it ?
1
Rate of Interest
Most Card companies charge 2.5% - 3.9% pm of interest if you don’t pay 100% of the dues.
All Card companies quote the interest rates as monthly but when you look at it is 30%-50% yearly.
So if you have a 1 lac due on your card you will have to pay Rs 2500- 4100 monthly as interest and which is as high as Rs 30000-50000 yearly.

Remedy
Only use Credit Card as a convenience of not to carry cash and pay 100% on due date and only use 30-45 day of free credit period given by Bank. Never use Credit Card when you are not sure that you can pay 100% of your dues.
2
Withdrawal of Cash from Credit Card
Most Banks give you access to withdraw Cash on your Credit Cards from ATMs.
Consumers thinks it is at a nominal cost but it come with interest rate of 35-50% annually.

Remedy
Credit Card is not an ATM card – only use Debit Cards to withdraw cash.
Even if you withdraw money in emergency , ensure you pay as early as possible.
3
Minimum payment Due
When you receive statements you see a minimum payment due amount which is 5% of your total bill.
A large part of Consumers think that is payable at that time and pay that much amount only.Instead Pay 100% of amount due,
as on rest 95% you have to pay 36%-50% rate of interest.

Remedy
Only look at total due on your Credit Cards. Say yes to 100% payments on Credit Cards.
4
How to get real Reward points.
All Banks offer usage based reward points or Cash backs on shopping on Brands and Online shopping discounts these days.
A consumer needs to understand what he needs to use his Credit Card for.Otherwise all what looks like a attractive offer on shopping from credit cards ,doesn’t actually get you any discounts

Remedy

Where do you spend most i.e. Petrol/ Airtickets/Shopping @ Particular store.
If at any place you spend more than 5000 a month and that place has a Cobranded card – just get that card- it will give you actual rewards.
You can save 1-2% of your monthly spends via that route and ensure you save money by using credit Cards and earn from it.

5
Multiple Credit Cards
Once you have one Card you are flooded with offers on other Bank Credit cards and at time you end up taking these 4-5 Cards different bank cards.
Most cards come with some sort of fees and then you feel the pinch.

Remedy
Opt for Max 2 Credit Cards of that one can be Visa and other can be master card .
Opt for Free Annual charge Credit Cards and one card should be Co-Branded as per your usage needs.
Credit Card is an convenient plastic made to lure to spend more.Control and be disciplined and you will never fall in any Debt Traps.
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