- Overspending: Credit Card limits can exceed to a huge extent. According to data, People start making unnecessary expenses. These unnecessary expenses increase the debt of the person and can have a mental headache.
- Fraudulence: Thieves can take your card information and can make improper use of it. It becomes the responsibility to inform the bank. The more you delay in informing the more the chance that you will lose money.
- High-Interest Charge: If someone fails to repay a credit card amount within the period high-interest rate is charged to them. This penalty percentage varies from 30% to 40% which is a good source of income for the banks.
- Cash Withdrawal: Credit Card charge a high fee on withdrawal of the money from the card. Different types of fees will be charged, such as cash advancement fees, ATM fees, etc. Use a debit card for cash withdrawal.
- Minimum Due: A lot of credit card holders, instead of paying the full bill, pay the minimum due. Due to this, they pay more interest. Interest is added to the remaining amount of the bill and you will fall under the debt trap.
- Hidden Cost: Credit Card has several taxes and fees. Penalty for late payment, and if you want duplicate statement you will be charged fee, one must also check their Credit Bills as EMI paying the bill, which degrades the credit score.
Credit Card : Work, Types, Eligibility, Documents Required & Advantages