10 commandments of using credit cards

After the holiday shopping season, it's time to pay your credit card bills. Improper use of credit cards can negatively affect your budget. So don't let it happen to you.

1. Don't ignore a credit card bill. Pay balance in full every month. Pay on time. Don't pay late. Sometimes late fees are as high as 30-40% of the outstanding amount. If you pay late, your payments begin to fall behind. You become a defaulter if you don't pay consecutively twice. The company can block your further transactions. Besides this, the company can also initiate legal action against you based on your income, outstanding amount and your bill payment record.
2. Sometimes customers pay the minimum payment and opt for credit revolving facility. You are a loser in that case. You lose on the 50-day credit period. If you don't pay on time, whatever you buy next time on the credit card, interest will be charged on the purchases from day one.
3. Stop using the credit card until the balance is paid in full. It is a loan that must be repaid.
4. Limit the number of cards.
5. Generally, if you spend more than the credit card limit, the credit card company doesn't block your transactions. But you end up paying huge interest rates on crossing the credit limit. Interest rates as high as 5% are charged on the amount outside the credit limit. Normal interest rates on credit card are between 2% and 4%.
6. If you are withdrawing cash from your credit card, then you will have to pay cash advance fee of 2-2.5% besides 3% existing interest rate.
7. If you are withdrawing money using credit card from some other bank's ATM, then the cash advance fee will be much more than usual. With this, your free credit period also ends and interest meter starts from the day one.
8. Use credit card to withdraw cash only in emergencies. You have to pay cash advance fee at the rate of 2 to 2.5% besides the regular interest rate of 3%.
9. If you are withdrawing cash using credit card from some other bank's ATM, then the cash advance fee will be much more than usual rate. With this, your free credit period also ends and interest meter starts moving from the day one.
10. Don't throw away your receipts until you compare them to your statement. Review your monthly statement for accuracy.