While credit cards offer a variety of benefits to their users, they can also pose serious concerns to individuals who lack financial discipline. They can have a long-term negative influence on your financial health if managed in an improper fashion. These five frequent symptoms imply that you are misusing your credit card:

  1. Paying the Minimum Amount Due on a Regular Basis

Many credit card users make the mistake of believing that paying only the minimal amount owing will save them money on interest. Paying the minimum amount due will only save you money in the long run by avoiding late fees and a blow to your credit score. On the unpaid portion of your credit card account, you will still be charged significant finance charges each annum. Furthermore, failure to pay credit card debt results in the loss of the interest-free period on new card transactions until the entire unpaid portion is paid off.

Convert the unpayable portion of your credit card debt into credit EMIs if you are unable to repay the entire balance. Finance costs on overdue dues are substantially higher than the interest rate on credit EMI conversions. This option offers repayment terms ranging from 3 months to 5 years, allowing cardholders to pay off unpaid credit card bills in smaller chunks at a cheaper interest rate, depending on their repayment capacity. Furthermore, taking this path restores the benefit of a credit card’s interest-free period.

  1. Cash Withdrawals from ATMs using Credit Cards

Cash withdrawals made with credit cards are subject to fees of up to the amount withdrawn. In addition, card issuers charge finance charges per annum from the time of withdrawal to the time of repayment. As a result, aim to prevent cash withdrawals via credit cards as much as possible. If it becomes completely inevitable, make sure to reimburse the entire amount withdrawn as soon as possible. As a result, additional interest costs in the form of finance charges would be reduced.

  1. Maintaining a Credit Utilisation Ratio of over 30% At All Times

It stands for the proportion of your overall credit limit that you have utilised. Because lenders typically perceive persons with a CUR of above 30% to be credit-hungry, credit bureaus may lower the credit score of those who are over the 30% credit card limit. As a result, keep your total credit card limit to less than 30% of your entire credit card limit.If you frequently exceed this limit, either ask your current credit card issuer to increase your credit limit or a new credit card apply online. If you choose either of these alternatives, you can lower your CUR as long as you don’t raise your credit card spending significantly after increasing your credit limit.

  1. Ignoring the Expiration Date of Reward Points

Cardholders can use accrued reward points for buying gift vouchers, converting them into air miles, purchasing products at specific merchant outlets or online partners, or adjusting them against outstanding card bills, depending on the credit card’s reward point programme. Most credit cards’ earned reward points, on the other hand, expire within 2 to 3 years of credit. Only a few credit card companies provide cards with no reward point expiration. As a result, you must always keep an eye on the expiration dates of reward points as well as the terms and restrictions that apply to their redemption.

  1. Declining a Credit Limit Increase Offer

Many credit cardholders are hesitant to increase their credit card limit because they are afraid of overspending and falling into debt. However, if used wisely, this can help you better your financial situation. As a result, if the card issuer offers you a credit limit increase, you should take it into consideration.

This will increase your financial ability to deal with financial problems or to spend more during festivals or other special occasions. Also keep in mind that increasing your credit limit can lower your CUR, which can help you improve your credit score and, as a result, your loan and credit card eligibility in the future.

Wrapping Up 

A credit card is a valuable addition to your financial holdings, but did you know that if you don’t use it responsibly, it may cost you a lot of money? Credit cards used incorrectly can turn into a curse, lowering your credit score and putting you in serious debt. While credit cards provide a lot of benefits to their clients, they also pose significant risks to those who lack financial discipline. They will have a long-term negative impact on your financial well-being if handled irresponsibly. 

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