1. High Interest Rates
Credit cards charge hefty interest (30%-52% per annum) if you don’t pay the full amount due. Paying only the minimum helps avoid late fees but doesn’t stop interest from piling up.
Tip: Always aim to pay the full balance. If not possible, convert it into EMIs or explore balance transfers to avoid hefty charges.
2. Overspending Temptation
The ease of spending and attractive rewards can lead to splurging beyond your means.
Tip: Track your spending regularly and stay disciplined. If you’re prone to overspending, consider leaving your card at home and using UPI or cash instead.
3. Fraudulent Transactions
Fraudsters can steal your card details and misuse them.
Tip: Be cautious with your card info, monitor your transactions, and report suspicious activities immediately. Always ensure your card is swiped in your presence.
4. Impact on Credit Score
Late payments or maxing out your card can lower your credit score.
Tip: Pay your bills in full and on time. Keep your credit utilization low by spreading out your expenses across multiple cards if needed.
By managing these risks smartly, you can enjoy the benefits of credit cards without falling into financial traps!