Credit cards: 5 payments you must avoid

Whether or not one can afford something really desirable, one can definitely purchase it, courtesy your credit card.

Using Credit Card EMIs? Keep These Things In Mind
Using credit card EMIs has become a common method for making expensive purchases more pocket-friendly. However, the EMI option comes with its charges including processing fee, interest of reducing balance, and penalties for delayed payments. (Photo: PTI)

Whether or not one can afford something really desirable, one can definitely purchase it, courtesy your credit card. However, fishing out a credit card at every purchase is the quickest way to trouble as many have found out to their cost?

Here is a 5-step power guide to help you ride out the credit card storm.

1.  The Big Fat Indian Wedding
This event is hyped more than a cricket match with our beloved neighbors! The list of must-haves for the big wedding day is a public document. Everybody takes the liberty to add points on the list as all the purchases are to be made by the hosts. It is easy to give in, when there is so much pressure from people and a cocktail of emotions inside you. However, never say we did not warn you. Putting wedding expenses on the credit card is as smart an idea as going on a sugar diet before the wedding! The celebration is going to cost money which shall have zero financial returns. Take a tab of the cash in your account and plan the wedding expenses accordingly.

2. Lend me a Vacation please!
A break from work or a dream to see the world, travelling features on the to do list of a lot of people. The ideal way to plan a vacation is by looking at your bank statement. The cash lying there must help decide on the destination and other details. Travelling ambitiously by deciding to pay for the expenses on credit card can send your financal plans and goals on a trip to hell. Earn for your vacations and take a vow to never pay interest for going on one. You definitely don’t want to go broke while taking a break!

3. What’s your currency?
Ask that question when you are abroad and pay in their currency! While fishing out the credit card may seem like the easy option, paying for clearing the debt later may not be so easy. Many credit cards levy charges for swiping cards in foreign countries which many appear nominal at a glance. However, charges accumulated over all the small purchases are enough to put a hole in the pocket.  Definitely wise to pay in the local currency over credit card swiping.

4. Education on our cards
And by that we do not mean credit cards! Agreed that the fees for education are sky high and it is difficult to arrange for all that cash. But that hardly means swiping that credit card for paying the fees right away. Since educational expenses are planned, money can be saved simultaneously. Alternatively, one can apply for educational loans which arrange for immediate expenses and allow for some time later to find a job which facilitates installment payments. These options work out better than credit card payments for educational expenses.

5. Miscellaneous credit purchases
These are those expenses which you may as well pay in cash. It’s only a matter of convenience or habit that the credit card is picked over a walk to the nearest ATM. Whether it is paying for a random clothing item picked at the mall, a pair of inexpensive shoes, a weekend dinner or movie tickets, make an effort to not put these bills on credit. This will discipline your spending habit and keep you out of financial trouble. Resolve to spend only for the fun bit and not on the interest part.

While credit cards are here to make our lives easier, we must consciously strive to keep it that way. Let’s make credit cards work for us rather than we working to repay all the piled up debts later. Plan better, pay smarter.

By Credit Vidya

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First published on: 24-03-2015 at 11:09 IST