Some people think it’s a status symbol. Some think it’s a basic necessity. Some are too scared to go near them(quite a few mouthshut members too). But in any case, most of us have at some point of time, had the desire to possess a Credit Card.
These days we can hardly call the Credit Card a symbol of status. Almost everyone seems to have one(at least the ones who we see in the shopping malls do). Though I do not think it’s a basic necessity, I definitely think it’s a very useful tool. It might turn out to be extremely useful in emergencies(when you cannot arrange for cash immediately). A medical emergency is a very typical case. May it not happen to anyone though.
Unfortunately, a lot of people get into trouble with Credit Cards. Most of the trouble can be avoided by taking certain minimum precautions.
1. Use your Debit Card
Keeping the Credit Card is useful. But let it be a backup. It is best to use your Debit Cards otherwise. If you want to use your Credit Card for the reward points, then you can do so, but use it just like you use your Debit Card. Make sure you do not overspend just because you’re paying later. You should comfortably be able to pay the bill in full at the end of the billing cycle.
2. Know your billing date
As soon as you get your Credit Card, call the Customer Care to find out your Billing Date. There could be a hundred reasons why the bill will not reach you in time. You will definitely know how much you have spent during the month(if you have spent responsibly). Or use Net Banking to keep track of it.
You do not have to wait for the bill to arrive. When you know it’s time to pay back, just go drop the cheque.
3. Use Net Banking
Almost every bank gives the Net Banking facility these days. In fact, some of the banks are even doing away with paper statements. They issue e-Statements through their Net Banking instead.
This is a great facility to keep track of your Credit Card Account. I recommend that you login once every 3-4 days and make sure transactions recorded are ligitimate. If you see any transaction not made by you, immediately call the bank and have the Card blocked.
If you have a savings account in the same bank, you can even pay the bills online.
4. Keep your Card in a safe place
It takes less than 30 seconds for someone to note down your Credit Card details if you leave it unattended. Know where you’re keeping the card. Make sure no one gets to look at the card(including your kids) while you’re away from it. Remember that to use the card on the internet, all one needs is a set of numbers.
Some suggest that the CVV Number(the last three digits on the signature panel) should be peeled off from the card after memorizing it. That will at least not allow anyone to use it on the Internet.
5. Do not disclose your Card Number
Never give your Card Number to anyone who claims to be calling from the bank. If in doubt, disconnect the call and call the bank yourself.
You should give your card number only if YOU AS A CUSTOMER call the bank’s helpline.
6. Pay the bill in full
Avoid paying interest. It’s best to pay bills in full. Interest calculations are confusing, and might lead to disputes. And more importantly, you pay more money!
7. Avoid Cash Advances
Withdrawing cash from a Credit Card is very expensive. Interest is charged on a daily basis from the day you withdraw. So cash advance is always the last option and should be left for extreme emergencies. Make sure you repay the amount as soon as you possibly can, if and when you use this facility.
8. Store the Card Number at home
Note down your Card Number(exclude the CVV number) maybe in a diary or some such reliable and safe place so that even if you lose your card, you have the number with you. Call the bank immediately to report the loss so that the Card can be blocked.
But do not store the number on your Computer. That way you’d be making life easier for hackers looking for Credit Card information!:-)