Credit cards are great for convenience and rewards, but small missteps can quietly hurt your credit score and inflate your interest costs. The good news: most mistakes are easy to avoid once you know what to watch for. Here’s a simple guide to stay on top of your cards and your credit health.
Paying after the due date
A single late payment can trigger late fees and interest, and if you’re 30 days late, it can dent your score. Set up auto-pay for at least the minimum amount and add a calendar reminder for the full bill. If you slip up, pay immediately and ask your issuer for a one-time fee waiver.
Only paying the minimum
Minimums keep the account current but let interest pile up. That turns small balances into long, expensive debt. Always aim to pay the full statement amount. If cash is tight, pay more than the minimum and stop new spending until the balance drops.
Maxing out your limit
High utilisation (balance ÷ limit) can lower your score even if you pay on time. Try to keep overall and per-card utilisation under 30 percent, ideally under 10 percent. If a big purchase is unavoidable, pay part of it before the statement date so a lower balance is reported.
Ignoring the statement
Fees, duplicate charges, and fraud slip through when you don’t review statements. Scan every bill for errors, annual charges you don’t need, and subscriptions you forgot. Dispute problems quickly and cancel add-ons you don’t use.
Chasing rewards and welcome bonuses
Opening too many cards for points can tempt overspending and produce multiple annual fees. If you do apply, stagger new cards, track spending targets carefully, and close fee-heavy cards that don’t earn their keep—after considering any impact on your average account age and utilization.
Revolving EMI and cash advances
EMI conversions can help with budgeting but may carry fees and lock you into interest. Cash advances are worse: they start accruing interest immediately and
often have extra charges. Explore cheaper options first, like a personal loan or a temporary 0 percent/low-rate offer if available.
Ignoring promotional fine print
Introductory rates end, and deferred-interest offers can backfire if you miss the payoff deadline. Note the end date, set a reminder a month earlier, and clear the balance before the promo expires.
Closing your oldest card
Shutting down your oldest account can shorten your credit history and raise utilization. If a card has no fee, keep it open with a tiny recurring charge and auto-pay. If it has a fee, ask for a no-fee downgrade instead of closing.
Applying too often in a short span
Each application can add a hard inquiry. Several in quick succession may signal risk and nudge your score down. Space out applications and check pre-qualification where possible.
Not having an emergency plan
Unexpected bills push many people into high-interest card debt. Build a small emergency fund, even Rs 10,000-Rs 25,000 to start, so a surprise expense doesn’t go on the card.
Bottom line
Pay on time, keep balances low, read the fine print, and use promotions wisely. If you’re already carrying debt, stop new swipes, pay more than the minimum, and consider a lower-rate consolidation. Small, steady moves protect your score and save you serious money.
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