8 Mistakes to Avoid When Using a Credit Card

Are you facing trouble getting your credit card debt-free? If yes, don’t curse yourself about it – you are merely one of the thousands of other consumers who feel the same. However, once you choose to change the way you spend on the Credit Card, it is possible to make your credit card balances manageable.

The below mentioned mistakes, if avoided will help you stop adding to your existing credit card debt and start giving you control over your spends.

1.  Pay More Than  The Minimum Amount Due

It’s very tempting to pay only the Minimum Amount Due every month (often Rs.250 to Rs. 500) and postpone the remaining amount to the next month when you’re under financial crisis. Trust Me, The Next Month Never Comes. My advice here is “Never Do It”.

I will tell you why. Not only will you never pay off your bill, but the interest rates that credit card companies charge will add to the balance every month. Instead, pay as much as you can as payment if you cannot afford to clear the amount. Wherever possible, try reducing unwanted expenditures to focus on paying off the credit card dues. It will be well worth going without any extras like dinners at your favorite café or shopping unnecessarily when it can help you sleep easier in the night knowing that you will soon be free of debt.

Read: What is a Virtual Credit Card?

2. Don’t Use Credit Card for Day to Day expenses

Except in justifying circumstances, you should have your budget under control so that you can at least pay for your monthly expenses with your monthly income. By keeping daily purchases like groceries and utility bills off your credit card, you’ll be taking a major step in the right direction to getting your spending under control.

3. Beware of Credit Card “Rewards”

The reward points that you earn from credit cards, are not any worth if they surrender you to the extra interest rate because of the purchases that you made in order to earn the reward points and then are unable to make full payments. The credit card reward schemes that allow you earn points on your credit card purchases, if calculated often come out to an effective reward of 2% or less.

For example, I get one point for each Rs. 100 spent on my credit card, but you must have at least 500 points to redeem the points, which means that I have to spend at least Rs. 75,000 to accumulate those points. Because the amount of interest that is charged on outstanding account balances exceeds the 2% bonus that you receive, it may not be any worth to incur the interest charges for such a small reward.

4. Never use your Credit Card Overseas

For every overseas purchase you make you could be subject to an international transaction fee and a lousy exchange rate. So, even if you are the perfect credit card customer and pay your bill in full and on time, certainly the card issuer is making money out of you!

5. Never take the Cash Advance Facility

Credit card companies employ many tactics to pull money out of your pockets and providing the Cash Advance facility is one of them, which gives you the freedom of withdrawing Cash on your Credit Card  from an ATM. The main reason why taking a cash advance should be avoided is that you start accruing interest the minute you take out the cash. Unlike regular credit card purchases, there is no interest-free period offered on Cash Advance.

Read How are Interest – free days calculated for a  credit card?

The credit cards companies will also send you a pin number shortly after you receive the card so that you can use your credit card to get cash from an ATM. This PIN is also sometimes needed for registering and managing your card online. But trust me, what I did with this PIN was that after registering my Credit Card  online I shredded the PIN and threw it in the bin 😀

6. Do not apply too many credit cards

If you already know that you are not good at managing credit cards well, don’t give yourself more enticement in the form of more cards. It is also possible to miss payment deadline when you try managing more cards which have different billing cycles and different due dates.

7. Avoid Late Payment Charges

Late payment charges are another source of income for the Credit Card companies and also subject you to additional interest charges. At least, if you cannot afford the full payment, pay the minimum Amount Due and Avoid late payment charges. (Doing this, always keep the Point No.1 of this article in mind)

8. Never Ignore Your Debt – You  have  to clear it

People become tensed or embarrassed by their credit card debt that they simply stop opening their bills and pretend that the problem isn’t there. This is like fooling yourself. The debt is in your name and whatever be the reasons, you are the one who has to clear them. In addition, while you’re ignoring your bills, interest rates are causing the balance to grow each day. Also, missing on your payments may get you in the CIBIL Defaulters’ list and affect your credit score.

Read: How do I register my Credit Card for Verified by VISA?

Ignoring your debt can also spur the recovery departments into action, and lead to harassment with the unsavory tactics some collectors are employing these days.


Cleaning up your credit card debt takes time and self control, but the steps outlined here aren’t difficult. There’s no reason that credit cards can’t be a helpful and a convenient tool – assuming that you can learn to use them sensibly and responsibly for your own welfare. These tips will help you keep control of your cards instead of letting them control you.

What is the strategy that you follow when you use your Credit Card? What are your views regarding the points listed above.  Please mention  below if I missed on any important Point that you would like to be shared with the readers.

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    1. This is a real achievement bro.. trust me… What my belief is that Having a credit card and availing its benefits is good… but staying away from it is even better… You make spends within your limits… and this is really good that you are managing your wealth well withour a CC… 🙂

      In my coming posts I am going to discuss about what to look when applying for a credit card… so keep visiting and keep expressing your views… 🙂

  1. yes what you said is correct. I managed my credit card very perfectly. like using it only for the big transactions and also used the card in such a way that i will get maximum number of days to pay the bill.But i got tempted and choose option 5 (Advance Cash) and spent that on some personnel use. Then after that it became very difficult to come back to normal stage (This option is much danger than loan). If i would have seen this article earlier i would have survived from that. Bad luck. it is good that you are making other’s or new comers aware of these things. great. Kudos to you.

    1. Thanks a lot Chandrasekar, I am glad that you liked the article.

      The advance cash is tempting 😉 This is a mistake that most of us do because till you get the Credit Card statement, you do not feel the pain that you are the only one who has to pay for it. What I would suggest is instead take a personal loan on which you will get half the interest rate.

      Keep visiting EquiTipz and share your views. This will help our readers too… 🙂

  2. I had a very strange experience. I have always paid my credit card bills on time and in full, for the past nearly 30 years, with many different CC companies. I have never believed in paying by instalments, because that can become extremely expensive what with the usurious rates charged by the bank, and unmanageable. But a few years ago, one of the CC companies in India (very huge bank and very well known and with whom I had been banking overseas for more than 10 years) suddenly downgraded my credit and cash limits from Rs. 1,70,000 and Rs. 70,000 respectively without giving any reason.When I enquired why they did that, the “reason” they gave me was the obtuse “This is due to our internal policy guidelines”, which they were unwilling, and refused, to disclose. So finally I cancelled the International Card, and they did not even ask why. I am now having a slightly different problem with another well known major US bank (also with whom I banked for many years overseas) who are refusing to entertain my application for the same reason – “internal policy and CIBIL guidelines” !! I find it incredible that anything can be wrong with my credit history, which I believe is impeccable. Again I get automated stupid responses, and it seems only machines operate these banks. What recourse do I have and is there any regulatory mechanism by which I can get more information, and take action these unilateral actions by the bank? Please advise. Many thanks in advance.

    1. In this case you need to drop a mail to the appropriate bank team with your issues..they will will provide you full support with reply mails…mention your conversation with executive..

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