The use of credit cards wisely can be profitable. You can build a good credit track record, take advantage of many promo fit the lifestyle and make it easier to buy a lot of needs that are sold online within and outside the country.
But the fact that many credit card holders who do not pay the credit card bills in the last three months. In addition they just pay the bills with a minimal amount.
Yet habit like this would actually harm the owner of the credit card and trapping them in debt environment that is never ending.
Here are five credit card traps and how to avoid them:
1. Using a credit card to the limit
Why is this not advisable? If the use of credit cards is greater than usual, even up to a maximum ceiling limit of funds that you can use on your credit card, the bank will consider you depend on credit cards.
As a result, the level of your credit worthiness in the use of credit cards will be reduced, so you will be hard to get other products such as extra credit cards and loans in the future to come.
Example: if your credit card limit of Rp 5 million. Of the limit, you have to keep the limit was used less than USD 1.50 million
What to do? Keep the rest of the limit of about 30 percent of the total given limits.
2. Paying only the minimum payment
Credit cards allow you to pay only 10 percent of the total bill, but it means that you will be charged interest on the remaining 90 percent were not paid.
Example: You had a debt of $ 2 million on a credit card. Then you use another Rp 200 thousand. So the total to be paid now is Rp 2.2 million
If you pay the minimum payment of 10 percent or Rp 220 thousand, you still have to pay interest of 2.95 percent from Rp 1.98 million, amounting to Rp 58 thousand.
At the end you have to pay interest up to Rp 754 thousand a year so that the greater your debt at the end of the year.
What to do? Pay the bill in full, not the minimum bill that you do not pay interest on the total expenditure.
Diligent contact customer service of a credit card issuing bank and ask how much you spend each time you use and the maturity date. Bank operator will help you explain the bill and the due date.
3. Late paying bills
Late paying the bill is not recommended for credit card holders. Why? Since you’ll be exposed to a late payment (late charge), plus interest charged on the remaining limit.
Example: You had a debt of $ 2 million on a credit card. If one day late, you’ve hit a late charge of 3 percent or Rp 60 thousand and an interest rate of 2.95 per cent of the rest of the applicable limit, or Rp 59 thousand.
So the total you pay is Rp 119 thousand, or in other words, had 6 percent of your total debt in one month.
From being exposed to this trap, you must return the card is credited as its function: as a means facilitate payments, not loans.
You also have to pay all bills on time before the maturity to be free of interest and late charges.
If necessary, install the due date on a calendar alarm or reminder on your phone so you do not forget.
4. Pull Cash
Withdrawing cash is not recommended. Because you have to pay a surcharge of 3 percent or a minimum of USD 100 thousand from the amount withdrawn. In addition there will be interest from the total amount withdrawn.
Example: You attract Rp. 1 million from ATMs. You must pay a minimum fee of USD 100 thousand or 3 percent of the total taken.
Additionally you directly in contact with the current interest too! So suppose you withdraw cash at the beginning of the month, charge fees to be paid is Rp 100 thousand + Rp 29,500 = Rp 129 500.
It is already 13 percent of the total cost of your last pull – in 1 month.
So do not ever withdrawing cash with a credit card! If you’re traveling and need cash, use debit cards with the logo of Mastercard / VISA. Might be subject to surcharge fee, but it is very much cheaper than if you took from your credit card.
5. Not knowing the amount owed on credit cards
Call the phone number on the back of your credit card to check the number of bills to be paid, such as: How much will it cost, when the next bill will be sent, and when the due date for each date of credit card usage.
Hopefully the above tips can help you manage your credit cards more wisely and to avoid the pitfalls of credit card debt.