Rotating use of credit cards to get a longer interest-free period,Economists warn against getting involved in complex matters such as having multiple credit cards.When you hear the word 'credit card', many people find that the bank's debt, which charges interest on interest on interest, is tricky.In fact, not many people understand that credit cards are very useful.Some people are said to be getting into trouble with the method used and blaming credit cards.So are credit cards harmful? Let's see how to use them without any hassles...
Some people think that credit cards can motivate us to spend more than we think we can spend.If so, the problem is with the card holder and not the credit card.Gone are the days when I used to be afraid of having a credit card, and now it's all over. The younger generation working in such sectors uses 5 or more credit cards.It's not because you want to make yourself look like a mass,It is used in order to get a long-term interest period in the rotational system.This means that the first card payment is used in a rotational manner to pay with another card and the same is to be paid with another card.
As a result, they are unable to pay the full dues and get into trouble by incurring unnecessary high expenses.To understand the disadvantages of a credit card, the reason is that people don't understand the pros and cons behind it and how to use it properly.It is important to know the mathematics behind a credit card that may have been hidden behind it before using it.
Pay the minimum outstanding amount (MAD):
In credit card terminology,MAD stands for 'minimum outstanding amount'. This is the minimum amount you need to pay before the last date to properly keep your card account.By paying a minimum amount, you can avoid delayed payment and any negative impact on your credit score.
Even if you pay the minimum amount, you will have to pay interest on the outstanding amount.It is a well-known fact that the interest rate on credit cards will be 40 per cent per annum. Let's take a simple example to better understand this.
What happens next in these 3 options?
1. No interest will be paid as you have paid all the dues and there will be no arrears on the due date.
2. If you have paid only Rs.1500 as minimum arrears, the remaining Rs.28,500 will be charged along with monthly interest.
3. Interest will also be levied on Rs 30,000. Additionally, a late fee will be levied on account of failure to pay the minimum amount (Rs 1,500) that you have to pay.
Credit card users mistakenly assume that they have to pay a minimum amount. But, if you pay the minimum dues late, you will have to pay pine for it. Also keep in mind that higher interest will be calculated for the remaining outstanding amount.
If you do not pay the card payment in full, you will not get an 'interest-free loan term' to repay the loan that the bank will give you for subsequent transactions until you do so.Interest will be charged on the same from the first day of completion of the transaction.
The use of a revolving credit card, which encourages many to escape from such problems, One should never indulge in hacks like maintaining multiple cards.Make sure to pay the card bills in full,That means try to pay the minimum dues or the entire bill amount without a rupee dues.
Otherwise to simplify the use of a credit card, to prevent spending in unnecessary ways,Learn to control your desire. Plan only what you need and learn to buy with a credit card. This will help you recover from the great misery of interest.