How to Avoid Common Mistakes with a Cashback Credit Card?
Cashback credit cards, as the name suggests, provide you with a percentage of the amount you spent, as your cashback reward. The reward type is cashback here, which is a decent way of saving a percentage of the amount you spent and getting it back as cashback. Talking about a cashback credit card, SBI Cashback Credit Cards seemingly has lesser competitors in the market.
Managing a credit card has its risks, but this does not overthrow its benefits. The credit card has a buy now pay later norm. This is pretty attractive for people and it sure has perks like dining discounts, and a fuel surcharge waiver you even get a percent of your spent money back, be it as cashback or as reward points.
However, even after having all these efficient ways to help you save money, there are fees levied by the banks that can put you into debt. These fees are only levied under certain criteria and in some cases like late payments or no payment.
Mistakes to avoid –
Be it a cashback credit card or any other type of credit card, you will have to check out all the necessary details such as the fee and structure of rewards of all credit cards to be on track. Making credit cards a useful tool needs nothing much just being responsible. Here are a few mistakes to avoid which you will have to avoid:
- Making only minimum payments –
The minimum due payment amount will let you keep your account in good standing and avoid a late fee and other penalties. But this will surely stretch the amount of time to repay the debt. Not only time but you will also have to pay the interest fee on the standing amount. If you do not pay the amount in full, and start making more expenses, it will lead to a very high amount on which you will have to pay interest.
- Carrying balance –
Carrying your balance forward increases the amount to be paid and every month high-interest rates keep getting added to that amount. Carrying a balance forward can be quite risky, in case your bank or card charges high-interest rates.
The amount which is due in your bill is something that you will have to pay in full to maintain a good credit history and avoid any interest rates or charges on the card.
- Overspending –
Credit cards are very convenient to use and a lot of users tend to spend over the limit. This kind of overspending will decrease your credit score. Overspending is very hard to handle especially in online cases where you usually don’t know where all the money goes.
In this scenario, it is a must for a person to keep the credit utilization percentage below 30% and only purchase or spent every month till the amount you know you can pay off.
- Missing Payment –
Missing payments is something, everyone is guilty of. Not all people miss payments, but 90% of the time people miss their due dates and miss their payments. This adds the late charges and interest rates on the outstanding amount thus increasing the amount.
You can use autopay to make your payment on time. This is a very reliable tool that can help you make your payments on time. If you prefer to pay the bill on your own, you can put it in your calendars and reminders.
- Taking Cash Advance –
A cash advance is a feature that is especially for emergencies. But this is a very expensive feature you can have with your credit card. This will allow you to withdraw cash but unlike other purchases, you will not have any interest-free period or grace period present. This means you will be charged finance rates on the amount from the time of withdrawal.
You get the maximum benefits of the credit card until you are consistent with the rules and regulations and understand your responsibility as a cardholder. It is important to know very detailed information on your card which you can check from our website or by following us on our Facebook page.
The thorough study of your card will help you adjust your expenses and manage your finances. These above-mentioned pointers should be kept in mind while mapping a plan for your expenses and credit card bill payments.
