Home Loans Credit Cards Effective Usage of Credit cards to avoid Heavy Debts

Effective Usage of Credit cards to avoid Heavy Debts

Usage of Credit cards

Learn Effective Usage of Credit Cards

Credit card schemes will have an impact

Are you holding many credit cards? Then the first this is to consolidate it. Transfer the balances of costlier credit cards to cheaper one. Find out the schemes on offer by the credit card companies for Balance Transfer.

There are transfer schemes like :

Converting your credit card balances to EMI’s. In this your dues will get converted to a loan at smaller interest rate and you could repay it at EMI. Here you cannot prepay your dues. It has to be on EMI.

Lower interest rate

Another way is to transfer your balance at a lower interest rate. A new credit card will allow you to repay your old debt at lower interest rates. There will be a limited time frame for doing this. Also any new purchases cannot avail the grace period.

Example :

Bank A can offer you a balance transfer where you could transfer your balances from another card to a discounted rate interest than your old card. Here you will gain from paying heavy interests to the other Bank’s credit card. Even Bank A can offer you to make the balance amount to a EMI which will be more affordable for you to pay back. Some banks even offer upto 3 months waiver of interest on transferred balances.

Catches on a Balance Transfer

When ever you transfer balances, you have to be prepared to pay the annual fees and a stipulated transfer fees. You may also lose any reward points on the transferred balance. Always remember that the attractive lower interest will be only for few months, after that period you have to pay the regular interest rates. Always check for this and transfer balance only if you can benefit after considering these costs.

Using Low Cost loans

Credit card outstanding always have a heavy interest attached to it. You can always look for cheaper alternatives like personal loans for which the interest rates are a only a fraction of credit card loans to pay back your balances. It can help you to cut cost on interests. Even certain employers provide interest free loans, that could be another alternative to clear your dues.

Carrying Balance to next month could lose grace period

Most of us do not read the terms and conditions of credit cards in details. Certain cards will give you interest free credit upto 50 days, but it will not be applicable if the previous month balance was not settled. This will give you a heavy interest on all other purchases made on this month starting from the date of purchase.

Avoid cash advances

It’s a Mantra for Credit card usages €œAvoid cash advances€. Cash advances from credit card are very expensive. Avoid making cash withdrawals from your credit card. It will cost you a transaction fees of upto 3% and an interest rate of upto 3% per month on the balances. (Interest rates may vary on each bank).

Recommended Read :


  1. Credit cards poses financial risks if precautions are not taken. Using them judiciously is the key to avoid undue errors. Also, banks should be cautious before offering credit cards. Western countries have a policy of checking credit history/payment history before issuing credit cards to new users. The similar approach can be taken by the banks in India. Also, users should have a good financial strength to regularly pay the bills. Subscribing to reminders for bill payments helps to prevent payment delays.

  2. Credit cards in many cases gives us financial liberty. It is such an option that allows us to buy things even at a moment when we do not have liquid cash ready. But it can cause real problem if we go on buying things using credit cards. So I feel in a month having two designated dates to check your credit card balance can be a good practice.

  3. Credit cards are something which is fun to use but if not used carefully it can take you in heavy debts. One need to use credit cards carefully to avoid such debts. Credit cards give you freedom to do expenditure the way you want but at the time of paying the bill if you don’t pay the money given by the bank to you it can create a great mess. Bank should also do something about this just giving away credits cards and making money is not good. Bank should set a limit and always inform the costumer about the expenditure made by them by using the card.

  4. Really, one needs to know that apart from financial liberty credit cards come with some risks as well. The article is a reveal-er of the same . I appreciate the way every possible risk involved has been described truly with no offenses. What i liked the most are the facts that have been described here for the reader to get aware of all the darker sides( would be a bit harsher to mention, though) of these cards .

  5. I never knew this about credit cards that may even cause heavy debts. At first the bank employees just try to brainwash us to buy a credit card. But as usual, we fail to read the terms and conditions provided be the bank. This is a very important article to all the people to know what people are doing behind their back.With this they can just shift to or transfer the balance which can reduce their interest rates. But before transferring from one account to another you should be careful that you don’t make the same mistakes again.

  6. Its a really useful information at the correct time of the day. I was wondering if a EMI method of payment is possible in credit card. your artical came just in time for the help. The detail are precise and to the point . Now i can confidently handle my heavy debt

  7. Credit cards are plastic money which helps an individual to spend now and pay later. It has its pros and cons. The banks do not issue credit cards to kids, it is usually given to individuals mature enough to understand its worth. But at times we all fall into the viscous trap and are lured to spend more. This we repent later but this is how we grow up. A simpler way may be to learn from other’s mistake or previous mistake.

  8. Shopping with credit cards could be an easy and effortless thing as you never need to worry about money but when we get our credit card bills; the situation is not the same but completely opposite. Many people often do this mistake and toss themselves in deep pit of debts.


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