New Delhi: Living carefree without having to worry about money is a dream for many, and to help achieve this, the banking system introduced the concept of credit card facilities in the past.
Credit cards come with numerous monetary benefits, making transactions and purchases convenient and hassle-free. They offer a sense of financial freedom and flexibility, allowing users to make purchases even when they don’t have sufficient funds at the moment.
Often times, credit cards can be a noticeable financial burden and it is all natural to commit mistakes when trying to handle it. In the long-run these mistakes may result in increased debt, higher interest rates and can destruct one’s credit score.
In this article, you will be coming across some common mistakes to be aware of while supervising your credit card debt.
Althought, it is a bit hectic procedure to keep a check on your debt, we have also provided some tips to help you organise it more effectively.
1. Making minimum payments
One of the most prominent faults that people make in dealing with credit card debt and only making the minimum payments. This might seem like a better way to keep the debt under control, but it leads to more debt in the long run.
The reason behind this is that the least made payments sometimes cover the interest on the debt, ignoring the principal balance untouched. As this cycle continues, it can transform into a vicious cycle of debt, making it harder to come out from.
To avoid this mistake, try to pay a larger amount than the minimum amount and in that way, the entire amount due-each month will reduce the overall debt.
2. Forgetting payments
Missing credit card payments can lead to heavy consequences. With late fees it can cause the risk of increasing interest rates; affecting credit scores badly.
It is better to take assistance from your credit card company if you are finding it hard to make your payments. The company will then help you to create a payment plan, fititng to your budget.
3. Still making payments with credit cards
When you are stuck in debt, it might be appealing to continue making purchases with your credit card. Not benefitting anyone, this practice only adds up your debt and makes it harder to pay off.
Tips which can assist you in monitoring your credit card expenses
- Settling the debt from smaller amounts to larger amounts.
- Looking out for professional help
Drawing a budget- to keep track of your income and expenses.
(Written by- Mahek Nigam)
