Credit cards are one of the fast and effective ways to pay for unexpected expenses without depending on credit from your friends or having to take a personal loan for it, but when misused, the same credit card can damage your credit score and cost you a lot of money in the form of high-interest rate charges. Here we narrowed down common credit card mistakes that most people have been making, and here is how you can avoid them if applying for new credit. However, before starting your application, do check your cibil score for credit card. 

Forgetting to read the fine print written on the document: This is a major blunder we all are guilty of, which is not reading the terms and conditions thoroughly. Chances are very high that there could be some hidden terms and conditions or even charges that are usually written in the fine print, which most of us overlook. In the hope of selling you a credit card and achieving their sales target, the salesperson, too, might not be transparent in conveying some of the charges related to the credit card. So, next time you come across any offer claiming free lifetime membership, inquire about the offer and ask whether you will be charged annual fees or not. Amidst this, also inquire about the annual fee, late payment, rate of interest, and withdrawal charges. Knowing these charges beforehand can prevent you from paying unnecessary charges at the time of paying your credit card bill and also doesn’t affect your cibil score for credit card. 

Choosing the type of credit card you don’t need: Everyone knows that there are several credit cards in the market, and cibil score for credit card varies across banks and depends on several factors. But, the never-ending credit card options create further confusion for a consumer in selecting the right credit card as per their requirements. Result? They end up getting influenced by the advertisements and selecting the wrong credit card as a result in the end. To counter this, understand your spending habits and then compare them with the features and benefits offered by different credit card providers. If you find yourself using flights quite often, opting for a miles credit card by SBI makes sense, but for a student, it is redundant. However, just check the minimum cibil score required for a sbi credit card before applying to ensure you don’t face rejection. 

Paying only the Minimum Dues: Having a credit card gives us the assurance that one can fund emergencies if required, but some of us get into the pothole of spending too much than we earn. This sometimes leads us to create a debt that ultimately becomes unaffordable for us to pay on the due date. Result? We fall into the trap of paying just the minimum amount due and end up paying only the minimum required amount. What most of us don’t realize is that the bank will continue to charge interest on the unpaid amount until it is repaid in full. Since the rate of interest is usually very high on credit cards, your outstanding amount will naturally increase over time. To avoid such situations from happening, ensure you pay the credit card bill before the due date, even if it means postponing certain non-essential expenses. This way, your cibil score for a credit card doesn’t get impacted negatively. 

Carrying a balance month to month: Usually, people think that if they carry their balance on a credit card, their credit score will improve. It is a myth, do not fall for it. If you are going to carry a balance, it will hurt your credit score and will ultimately cost you money. If you are planning to get an SBI credit card, you have to fulfil the minimum cibil score required for sbi credit card, and carrying your balance will hurt your score. This is because your CUR will increase the amount of debt you have compared to your available credit, and so is your interest rate charges. As per the experts lower your utilization rate, the better it is for your credit score. 

Missing your due payment: Missed payments can hurt your credit score more than you can imagine. You can expect a drop of a few points from your credit score if you miss your credit card due date. Not just that, the bank is liable to charge you a late fee or a penalty interest rate. Especially if you are planning to apply for an SBI credit card, then not paying your dues on time can make them reject your application due to not fulfilling the minimum cibil score required for sbi credit card. 

Maxing out all of your credit cards: Using the majority of your available credit is never a good idea. Not only your utilization rate will be very high, but you also be giving off credit hungry image to credit bureaus. If you max out your credit card quite often and have no problem, then you can call up the bank and request for a credit increase or else your cibil score for credit card will continue to get affected negatively. 

Taking out a cash advance: Though it may look convenient that you can get some cash but doing so is one of the costliest things you can do with your credit card. As soon as you withdraw the cash, the interest starts to accrue on the amount you have withdrawn. Apart from that, cash advances on credit cards attract additional fees. At the same time, some banks charge a flat amount while others charge it as a percentage of the amount withdrawn. Banks will charge you a one-time cash advance fee which is usually charged as a percentage of the amount withdrawn. 

Therefore,

As mentioned above, people are guilty of committing many credit card mistakes, but the key is to avoid those mistakes that will ultimately keep you away from financial stress. And, it is not hard to get into the habit of using your credit card correctly. Set an auto-pay that will ensure you pay your credit card bills on time, use your credit card responsibly to ensure your credit score doesn’t affect negatively and thereby be able to fulfil the minimum cibil score required for sbi credit card, limit your credit card spending to 30% of its total credit limit, and review your monthly statement are a few of the ways that will make sure you get the best out of your credit card.