Know your Credit Card to prevent debt trap

Today more and more people have been lured by credit card companies to increase the use of credit cards and offering various types of credit cards like 0 % interest credit card, lifetime free credit card, petro cards, cash back credit cards, co-branded creditcards, EMI cards and so on. Credit Card is the latest form of money used worldwide.

People have become so much used to it that many keep multiple credit cards. But the important question here is how many of you really know each and every aspect of credit card?

Have you read the fine prints on your credit card agreement while applying for credit card?

Did the credit card company executive gave you all the details such as balance transfer fees, revolving credit charges etc?

Most would say NO and that's the truth. Most of us applying for credit card agreement never go through the fine prints.(most credit card companies have a clause which allows them to change the rate of interest any time, for any reason with a certain notice period) Most of the Americans are inattentive about their credit card account.

The important charges one should know about credit cards are:
  • Late payment fees or overdue fees
  • Returned cheques fee
  • Membership fee
  • Joining fee
  • Annual fee
  • Cash advance fee
  • Foreign exchange premium
  • Balance transfer charges
The convenient and comfortable use of credit card, most of the time invoke the card holder to buy things which are not very important. Avoid insensible usage of credit card.

So it is very important to know your credit card details, terms and conditions thoroughly to avoid debt trap and bad credit. To repay credit card dues you apply for another credit card and so on. Once you fall in a debt trap of credit card it becomes difficult to get out, and the various charges and interest aggravate the debt which may lead you to bankruptcy.
Related: Remeber To Use Your Credit Card Safely

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