Using your Credit Card efficiently
Tamilnow Articles -> While using your card - EMI, minimum payment and interest rates
While using credit card
To avoid distress at a later date, the below points may prove helpful.
If used wisely, a credit card can provide convenience and allow you to make purchases with out money.
1. Understanding need and want
Need is used to describe something you wanted badly. Using credit card responsibly means, recognizing which things you need and which you just want.
Many consumers are unable to take advantage of benefits of credit card because they carry a balance from month to month. Bad name about credit cards are related to hidden expenses.
2. Minimum payment
The minimum amount that you must pay for purchases done in that month so as not to attract penalty for default on payment of dues is minimum payment. Making only the minimum payment each month increases the amount of interest. So pay as much as you can on balance each month.
3. Payment by EMI
When you make a large purchase you may get an offer from the bank to opt to pay through the EMI facility. Give EMI a miss and, make the payment before the due date in one go.
4. Borrowing cash is expensive
Bank charges around 2 to 2.5% of the amount withdrawn. The interest on that amount also starts immediately. The interest rates are also quite high, roughly around 34% including service tax.