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Many people use credit cards for shopping since it becomes convenient and there is no handling of cash. And get an interest-free period in which they pay the entire bill. But some people, on the other hand, have a credit card and use it without thinking about the repayment and the interest rates. This leaves the customers in a state of debt and makes it difficult to pay their credit card bills on time. On the other hand, people who plan their credit card usage can simply manage their credit card expenses.

To prevent thinking that the credit card is a trap, ignore the bad aspects of it. You must plan every purchase you make with your credit card. Here are a few reasons why using a credit card can be a trap sometimes:

Pay-by date

Many customers are late in making payments on their credit card bills. They don’t pay by the due date and miss out on the interest-free period, so their credit card bills pile up. As a result, using a credit card becomes a trap. Pay the bills on time and avoid incurring late fees on credit card payments.

Shopping for things you don’t need

As the adage goes, “cut your cloth according to the size.” This means that you should utilise your credit card according to its available credit limit. Some cardholders misuse their cards by making unwise purchases, and as a result, their credit card debt piles up and they find themselves in a situation where they have to pay off large credit card debt.

Using the entire credit limit on your card

If you use your credit card to its full limit, you will be responsible for paying the entire balance down in a timely manner. Defaulting a credit card payment before the due date or during the interest-free grace period could lower your Cibil Score and cause your next credit card application to be denied.

Borrowing a large sum of money

Users who convert large credit card transactions into EMIs but cannot make the payments fall into a credit card debt trap.  Outstanding credit card bills can hamper your ability to take further loans or taking another credit card.

Conclusion

Using a credit card can either be a wise decision or a costly mistake. If you control and plan your credit card usage, it will never become a trap. On the other hand, if you use your credit card for frivolous purchases, you’ll be caught in a vicious cycle. Every person who uses the credit card in a planned manner has a good notion of using it.