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Dos And Don’ts When Using a Credit Card
Shiv Nanda
Jul 28 • 3 mins read

Dos And Don’ts When Using a Credit Card

3 mins read

Using a credit card gives you a sense of power and security. And as the quote goes, “with great power comes great responsibility.” Let us look at some of the dos and don’ts that will help you when using credit cards responsibly.


Pay Your Bills on Time:  It is important that you do not miss any credit card payments. Late payment will result in penalty charges, which will impact your credit score. This will harm your chances of gaining credit in the future. Paying on time also lets you enjoy the purchases on your credit card without incurring interest charges.

Pay Your Entire Bill: If possible, pay the entire bill amount. If not, definitely pay more than the minimum due amount. Aiming to clear your credit card balance every month is a very good strategy to avoid debt and paying interest.

Contact Your Credit Card Company if Needed: In case your bill is delivered late, or you forgot the due date and missed a payment due to some emergency, inform them and make the payment and avoid late fees. They might assist you to work out a manageable payment plan.

Keep a Credit Card with Low-Interest Rate: If you carry a balance each month, ensure that your card has a low-interest rate. Also, learn the impact of compound interest – the amount you are charged in interest on top of the purchase costs and interest charges unpaid in the previous months.

Use Your Card Wisely: Only purchase high priority items and things you can afford. Use in emergencies, when don’t want to carry cash. Before making “big” purchases, consider the worth of it by deciding whether it is a want or a need. Also, track your spending based on your budget when using credit cards accordingly.

Select Cards with Benefits That Suit You: Choose a credit card that suits your spending. Having a credit card that offers a great air miles program is beneficial to you only if you travel a lot on work or business, or take plenty of holidays in a year. Compare credit card company offers and collect your reward points without fail.

Be Aware of Credit Card Fraud: Always keep payment receipts and check them against your statements or online account. This will protect you from credit card fraud. Contact the credit card company immediately if you detect any fraud and avail protection.

Always Read the Fine Print: Credit card companies have varied terms and conditions about interest rates, late fees, annual fees, grace periods and default rates. When consumers fail to pay, credit card companies make money. Read the fine print and stay educated of the T&Cs and cardholder agreements.

Negotiate Your Annual Fee and Interest Rate: When you sign up for a credit card, you can negotiate an annual fee waiver for one or two years. You can also negotiate for lower interest rates. Keep evaluating the interest rate on your card periodically to ensure you are getting a good deal.

Review Your Statement Regularly: Check your statements monthly and verify the purchases and payments made. Ensure there are no unauthorized transactions and contact the credit card issuer in case of any anomalies.

Limit the Number of Credit Cards: It will prove difficult to keep track of transactions and payments on multiple credit cards. Therefore, it is advisable to have only one or two credit cards.


Don’t Miss a Payment: As explained above, it is important to pay your credit card bills on time.

Never Use Your Credit Card for Cash Advances: Withdrawing cash from a credit card will immediately result in higher interest rates.

Never Exceed Your Credit Limit:  Always stay within 30% of your credit limit. This will keep your balance low and help maintain a good credit score.

Don’t Use Your Credit Card Impulsively: Avoid spur-of-the-moment purchases using your credit card. This becomes a habit and leads you to debt.

Don’t Spend More Than You Can Afford: Always remember that paying by credit card is like taking a loan. It has to be repaid. Manage your funds and credit limit without “maxing out” your cards.

Don’t Use Your Credit Card for Everyday Purchases: Do not substitute your credit card for cash to purchase items like food, clothing, and petrol for your car.

Never Try to Clear Debt with a New Credit Card: This will only place you in further debt than improve your financial situation.

Don’t Share Your Credit Card Number: Never share your personal information or credit card number as there are identity thefts and phishing scams that ask for credit card details. Contact the credit card company in case of any suspicious activity.

Don’t Purchase Special Services: Credit card fraud protection and life insurance services are not necessary for consumers, and therefore, you need not purchase them from the company.

Using your credit card with caution has many advantages and reflects well on your credit history. It lets you take control of your finances without worrying about unnecessary debts.

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