Top 10 Practices of a Responsible Credit Card Holder

Top 10 Practices Of A Responsible Credit Card Holder

Credit is good, but only when it is absolutely necessary. An irresponsibly used credit card is a sure shot way of getting yourself into a debt trap that is nearly impossible to get yourself out of with out the help of a debt professional. So, for those who feel that they have been adorned with the privilege of being trusted with a credit card, this could be a wake up call to stay out of debt.

Use Your Credit Card for Emergencies
Make it a rule to use your credit card only for emergencies. You never know when you will need the credit facility your card offers you. Though the card facilitates you to buy something you would not normally be able to buy with cash, you should try to pay some amount of the bill through cash and the rest through your credit card. This will make it easier for you to repay the bill when it comes.

Don’t Use Your Entire Credit Limit
Your credit card may offer you a limit that is ten times your monthly salary. This is a temptation of getting into a debt trap where you will be repaying the interest most of the time. Try to use only 10 percent of the credit limit of the card. Do not over spend unless you are sure you can spare the cash from your next salary cheque. Don’t rush to use your full credit limit.

Repay Maximum of the Debt You Have Incurred
Make it a practice to repay the maximum of the debt billed to you. Many people try to stick around the minimum amount they have to pay, which is typically 10 percent of the bill amount. At this rate you will take about six years to repay the debt if you keep on using the card. Try to keep your credit card expense limited to 10 – 20 percent of the credit limit and repay as much as you can every month.

Keep Your Card At Home
If you find you are over spending try leaving your credit card at home when you go out. Take it with you when you feel you actually need to use it in an emergency.

Do Not Give Out Your Security Information to Anyone
Your security information is kept secret for a reason. Do not give this information to anyone. Not even to your best friend or credit card representative. This information includes date of birth, PIN and security questions.

Verify a Merchant Bill
Verify that the merchant outlet you have swiped your card at has only swiped the card once. Else you will be billed twice for the same transaction and will be a hassle to undo.

Never Give Out Your CVV Code to Anyone
Without your CVV code (the 3 digit number behind your card) you cannot make any online transactions. Your card number combined with this CVV number can be misused by any one who knows both. So when using your card at any outlet, ensure the attendant is not recording the CVV behind your card.

Never Leave Your Card Unattended
Many credit cards are stolen from vehicles. SO never leave your card anywhere out of sight including at your work place.
Check If the Card Returned To You Is Yours
Sometimes by mistake and at times deliberately, attendants return redundant cards to customers and retain the actual card for misuse. Check that the card returned to you is yours – every time.

Report Lost Cards Immediately
Do not wait to report lost or stolen credit cards. The damage might be much more than the nominal fee for blocking your card.

If you are careful with your card the above mentioned ten responsible actions regarding your credit card can save you many headaches – and a lot of money.