Tips for Credit Card Beginners

It is kind of thrilling to get your first shiny plastic credit card and the sense of freedom that comes with it. But tagging along with these feelings is responsibility, something you need to learn before you being to use your card. If you are a beginner, then it can be so tempting to just flourish your card everywhere. But, there are few of the things that should be kept into mind, if you are not looking forward to get trapped into bad debt. Following are the tips to follow, which will save your neck form the debt trap:

Stick to a budget: If you carry only cash, you can only spend whatever you have. With convenience of credit cards india, most of the individuals forget this funda to follow. It can be your financial downfall as you may end up spending more than what you can afford. So, you should be keeping the monthly limit expenses and try to stick to it.

Every time you swipe your card, you receive an alert on your mobile phone and you will get the idea how much you have spent or how much is left to spend.

Always pay the full amount on time: You will receive a monthly credit card statement telling you how much you need to pay. You should be ensuring that you pay the full amount on time or you will be charged a late fee. You should not be tempted to pay only the minimum amount due and roll over the balance to the next month. As, the credit card interest rates are higher, your bill will be inflated and become much hard to pay off.

Don't increase your credit limit: When the bank offers you a card, it will set a credit limit based on your credit profile and income. You may want to enhance this limit to fund more expensive purchases. But, ideally, you should avoid doing so for a year, at least not till you're more confident about how to use your card. So, unless there's a substantial increase in your salary, you are advised to stick to a low credit limit.

Avoid cash advances: You must not use your credit card to take a cash advance from the bank or at an ATM. Firstly; you will be charged a one-time transaction fee which could be as high as 3% of the advance. Secondly, you will have to pay a high interest rate on the money, and this interest will begin to accrue immediately after withdrawing the money from card.
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