1. Your ‘Credit Score’ is a very important piece of information on you
Maintained by Credit Information Bureau India Ltd, your credit score shows your credit worthiness ranging from 300 to 900. You may not get a big loan if your credit score is bad.
2. Fill the credit card application form yourself
Most salespersons will ask you to sign some dotted lines and fill the form themselves; yes, it’s less hassle for you but not in the long run.
3. Always know the interest rate charged by your credit card company on your purchases
Sometimes, when you’re issued a credit card, it is issued at 0% interest but that interest can change over time.
4. Know what kind of a late fee will you be charged if you don’t pay on time
You will be charged added interest along with a late fee in case you can’t make your credit card payment on time. Ask the salesperson how this is calculated.
5. Late fee remains the same even if the amount to be paid is very low
That is to say, whether you owe the bank Rs 1000/- or Rs 10/-, you will be charged the same late fee. So you might end up paying Rs 500/- for not having paid Rs 10/-.
6. Late payments will affect your reward points
If you don’t pay your credit card bills on time, you may not be able to avail all the reward points that were promised to you when you got your credit card.
7. Don’t be confused about payment due date
It’s usually not a specific number of days after buying a product. If your due date is a week before you buy something, you will only have a week to pay up.
8. You may be listed as a defaulter if you don’t pay up on time
If you’re reported to the credit bureau as a defaulter, it will become very difficult for you to get any loan or credit in the future. Pay all your bills on time.
9. If you don’t pay up, you could lose your assets
Once you’re declared a defaulter, all your assets will be paid over to the bank to satisfy liabilities. Earlier, this process was slow; now it isn’t.
10. You lose your interest-free period if you don’t clear bills
If you have outstanding payments left over from the previous cycle, then in the next cycle, you lose any interest-free period.
11. Make sure you know if there are any non-usage charges
Some banks charge customers for not using their credit cards. So even if you don’t use the card, you could still end up with a big bill.
12. Control your spending/shopping impulses
A credit card can be very bad for those people who can’t resist buying things. If you are such a person, then it would be better to stick to debit cards.
13. If you have received any verbal assurance from the bank, ask for it in written format
For example, you were accidentally charged twice for a single product. You called customer care up and they told you to pay once. Ask them to mail you the same information.
14. You may not have to pay up if a spouse dies and leaves you in credit card debt
If you inherited any asset from the deceased spouse, you may be held responsible to the extent of the asset. Otherwise, you are not legally responsible.
15. Most banks have a fraud alert system for your credit card usage
Though it’s not a legal requirement, most banks will check up with you if any ‘unusual activity’ occurs on your credit card.
16. You may have to pay for purchases made before reporting loss of credit card
Some companies might cover part of the cost incurred before loss was reported but most probably won’t. It will also depend on the type of card you have.
17. Banking ombudsman is your final ally
In case the bank refuses to address a complaint you made or you have any dispute with them, contact a banking ombudsman. Find one via www.rbi.org.in