Credit Card Uses: Credit card use has become common these days. While it offers many benefits, mistakes can cause more harm than good. A small mistake can increase your debt, lower your credit score, and weaken your future borrowing capacity.
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Credit Card Uses: The use of credit cards is rapidly increasing these days. This convenience not only helps us in emergencies, but also provides rewards and a better credit score if used correctly. However, even the slightest carelessness can lead to significant losses. Using the card in the wrong place not only increases your debt but also lowers your CIBIL score. Therefore, there are some places where credit cards should not be used.
In fact, credit cards have many hidden charges that people are generally unaware of. If you don’t want to regret it later, you should avoid certain places where using a credit card can prove detrimental. Today, we’re going to tell you about some places where people should avoid using a credit card, even by mistake.
1. Refueling at a Petrol Pump
When we often pay with our credit cards for diesel, petrol, or CNG, we are actually doing ourselves a disservice. Payments made with credit cards at petrol pumps incur service charges and GST, which further increases the cost of fuel. Furthermore, you could also be a victim of skimming. Skimming is a new method of scamming. This involves installing a small device hidden inside the card-swiping POS machine or ATM at petrol pumps or shops.
2. ATM Cash Withdrawals: The Most Expensive Mistake
Withdrawing cash from ATMs using credit cards has become a habit for many people, but it’s a costly mistake. Banks charge a cash advance fee of 2.5 to 3%, and daily interest is also charged on top of this. The key point is that there’s no grace period. This means interest accrues from the day the money is withdrawn. Even if you withdraw just ₹10,000, the amount can grow to ₹10,400 or more after a month. This additional burden directly impacts your pocketbook and leads to increased debt in the long run.
3. Loading Money into Digital Wallets
Avoid using credit cards to load money into digital wallets like Paytm, PhonePe, Google Pay, or Amazon Pay. Wallet companies often charge a convenience fee, on top of which you’ll also have to pay GST. This fee, even for small amounts, can be a significant burden on your pocket.
4. IRCTC Website
A credit card should also be avoided when booking tickets on the IRCTC website, as it often charges an additional one or two percent GST, in addition to the payment gateway fee.
5. Increasing Card Spending Between EMIs and Other Liabilities Risks
If you’re already burdened with a personal loan, home loan, or other EMIs, new credit card expenses can further strain your financial situation. Using a debit card or UPI is a better option during these times, as they allow you to spend only what you have in your bank account. This prevents the risk of accumulating unnecessary debt and keeps you in control of your budget planning.
6. Avoid Payments on Suspicious Websites and Unsecured URLs
It’s crucial to be cautious when making online payments. If a website isn’t HTTPS-secured or its URL appears suspicious, entering card details there can be a significant risk. Such sites increase the risk of data theft, fraud, and hacking. Cybercriminals often create fake sites to lure consumers. Therefore, make online purchases only on trusted and secure platforms to avoid financial losses.
7. Balance Transfer
Even making the mistake of transferring a balance from one credit card to another can be detrimental, as you incur interest rates and processing fees. Therefore, it’s best not to do this.
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