New Delhi: In an era where getting access to credit cards is very easy, not everyone has the knowledge of using the credit card with efficiency and strategy. Today’s young generation uses credit cards as a tool for leisure spending. Taking advantage of this, credit companies provide schemes that are very attractive. These schemes help save money, but only if applied with a responsible mind. Lets read about common credit card mistakes to avoid.

While we are talking about credit cards, we cannot leave behind the main keyword, CIBIL Score. CIBIL stands for Credit Information Bureau (India) Limited, whereas CIBIL Score is a three-digit numeric that has a rating summary of one’s spending habits, history, and report. This score ranges from 300 to 900. The greater your CIBIL score, the better your credit history, helping you get loans from banks and financing companies in an emergency or hour of need

Avoid Falling into the Trap of Leisure Spending on Credit Cards and Protect Your CIBIL Score:

There are many instances where we can make blunders in maintaining good credit score, sometimes we do that unknowingly. Using credit with consciousness can save you from that.

Common Credit Card Mistakes To Avoid:

Not Paying Credit Card Bills On Due Date-Irregular repayment history

While using a credit card, you should always keep in mind the cycle of repayment. An irregular credit card repayment history is one of the major reasons for decreasing CIBIL score. Sometimes, unknowingly, we miss the due date and think that it will not affect us, but sometimes it takes months or even years to restore and repair your CIBIL score. It is advised to pay off debts as soon as possible.

Never Withdraw Cash Through Credit Card

While taking a credit card, we all look for some or the other special feature. The companies, while selling the cards, explain different features, one of which is ‘cash withdrawal through ATM with credit cards.’ This special feature lands people in unknown debts that they might have never thought about. The cash you withdraw from the ATM charges a massive amount of interest. This interest starts adding up from the first day, ranging from 2.5% to 3.5%. This turns into almost 40% per annum. Avoid harming your CIBIL score by NOT withdrawing money from the ATM, and avoid paying the interest.

Closing Active Credit Cards

Never close an open account that you use regularly, or an account that is very old. Closing that account can reduce the time period your credit account has been open. This will lower your CIBIL score. Closing the account will also reduce the credit that is available. This will cause fluctuation in your credit usage ratio as well. Closing an old account also leads to losing the history of good repayment and relationships with lenders.

Here are a few tips to increase your CIBIL credit score, but remeber, It takes time to improve or restore your CIBIL credit score and bring it back to normal.

• a) Make sure you pay your monthly credit card payment on time.
• b) balance out a healthy mix of secured and unsecured debt.
• c) Use credit card in a ratio that your credit useage does not goes over.
• d) Report any mistake you see in your CIBIL credit report immediately.
• e) Do not be desperate and apply for another application, after one application has been rejected, do not apply for a loan or credit card right away.

Also Read: Credit Card Outstanding Dues Rising In India: What Is The Punishment For Such Defaulters?