A recent report from the Reserve Bank of India has reflected a 27% growth in credit card circulation in FY 2018-19, compared to that of the previous financial year. This indicates a major shift in the usage of credit cards as more and more Indians are relying on these.

Even though credit cards have several customer-friendly features and benefits, they can also accumulate a substantial debt in a short time. Credit card interest rates are high, and your dues may end up becoming substantial when you fail to pay. 

Tips to stop yourself from accruing credit card debt

  • Check the interest rate

Before applying for a credit card, it is imperative to check the interest rate. In case you fail to repay your bills within the due date, credit card companies will charge a high interest on your unpaid amount. 

The applicable rate of interest is not universal; thus, evaluate credit card interest rates before opting one.

  • Evaluate additional charges

Apart from the interest rate, there are several other charges associated with a credit card such as annual fees, late payment charges, etc. It is vital to evaluate these charges before availing a card as it helps in keeping your additional expenses low.

  • Only spend what you can afford

Sticking to the limit of what you can afford is the ideal thing to do. If you can maintain the spending under 30% of the total credit limit, you can use your credit card to improve your credit score.

  • Pay the total due amount

Credit card providers allow you to pay a minimum due amount every month to continue using your card. It may sound like an attractive feature, but the reality is different. You may have paid the minimum amount and using your credit card, but the company will charge interest on your outstanding, and it will be added to your next bill.

Thus, try to pay the full due amount after every month and do not carry forward any outstanding to the next month.

  • Pay your outstanding on time

Every credit card offers 45-50 days of an interest-free period. If you can pay your outstanding within this time, you are not liable to pay any additional charges. Therefore, try to repay your credit card debt within this period. 

  • Opt for a balance transfer

A balance transfer may help you to lower your credit card debt. It allows you to transfer your dues from one credit card to another, which charges zero or low interest for a complimentary period (usually 3 to 6 months). 

However, transferring the balance requires a fee; hence, make sure to check the same before availing such a facility.

  • ATM withdrawals are for emergencies

Credit card companies allow you to withdraw cash from ATMs. However, you must know that it is considered as one of the most expensive transactions due to its high credit card interest rate. Therefore, limit your cash withdrawals for emergencies to avoid unnecessary debt.

However, credit cards like the Bajaj Finserv RBL Bank SuperCard allow its customers to withdraw cash from ATM against zero interest for up to 50 days. Moreover, you can avail credit card loans against this card without any interest for up to 90 days.

Furthermore, the company also provides pre-approved offers to its existing customers. Apart from credit cards, this offer applies to other financial products like personal loans, business loans, etc. This offer makes the process to avail credits easy and less time-consuming. You can check your pre-approved offers by submitting your essential contact details.

To avoid paying high credit card interest rate, you should repay your dues within time and use your card efficiently. If you can follow the above-mentioned pointers, you may stop accumulating unnecessary credit card debt.