In today’s time, the use of credit cards has increased a lot. Not only in cities, but people have started using credit cards in villages as well. Let’s know about such 3 transactions, which should never be done with credit cards (When You Should Not Use Credit Card), otherwise you may get into trouble.
CIBIL score: In today’s time, the use of credit card has increased a lot. Not only in cities, but people have also started using credit cards in villages. Why not… the more transactions you do, the more reward points you will get and later on, you get gifts from those reward points, you can do shopping and also get cashback. Well, while using credit card, people often forget that they are actually shopping by taking a loan, which they have to repay later and even a small mistake can lead to huge losses. Let’s know about such 3 transactions, which should never be done with credit card (When You Should Not Use Credit Card), otherwise you can get into trouble.
1- Never withdraw cash from ATM
Neither the bank nor the agent tell this while selling the credit card. Rather, they tell that withdrawing cash from the credit card is a special feature. However, they do not tell that the cash you withdraw will be charged a hefty interest from the very first day. This interest can be 2.5 to 3.5 percent per month i.e. 30-42 percent per annum. Not only this, you also have to pay a flat transaction tax. Although you get a month’s time to pay the bill for shopping done with the credit card. If you do not pay the bill by the due date, you are charged interest. On the other hand, there is no time to pay the cash withdrawn from the ATM and the interest starts being charged from the very first day.
2- International transactions will be costly
One of the features of every credit card is that it can be used abroad as well. Many people are attracted to this feature of credit card, but many people do not understand the story behind it. When you use a credit card abroad, you have to pay transaction fees, which keep increasing and decreasing. By the way, if you want to use a card instead of cash abroad, then for this you can use a prepaid card instead of a credit card.
3- Do not use the card too much for balance transfer
There is a feature called balance transfer on many credit cards. Using this, you can pay the bill of one credit card with another credit card. It may sound very amazing that you get 30-45 days to pay the shopping bill on one credit card and then pay the first one with another credit card, in this way you will get 2-3 months to pay the shopping bill.
Let us tell you here that balance transfer is not free, for that you have to pay a charge to the credit card company or bank. It has another big disadvantage. Credit card is a kind of loan. In such a situation, if you pay the bill of one credit card with another, then it means you are taking another loan to settle one loan. In an emergency situation, when you have a great shortage of money, then there is no problem in transferring the balance, but do not make it a habit. Doing this too much will have a bad effect on your CIBIL score.
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