Credit Card Tips: These 5 mistakes cost a lot to credit card holders..

It is important to use a credit card correctly, especially if you are a new user. This is because when a person gets a new credit card, they often make some mistakes in excitement. If this mistake is minor, then it is okay, but if the mistake is big, then it can cost you dearly. Let us know 5 such mistakes, which can cost you dearly.

1- Paying only the 'minimum due'

The interest on a credit card is very high. In such a situation, if you pay only the minimum due, then you may suffer a loss. In such a situation, even if your card is not closed and you do not have to pay late fees, you may have to pay a huge interest. This interest can range from 36 percent to 48 percent.

2- Delaying payment

If you do not pay on time even once, then along with heavy interest, late fees are also charged on it. The biggest disadvantage of this is that your credit score gets spoiled, which remains in your report for a long time.

3- Spending the entire credit limit
If you spend the entire limit of the card or a large part of it, then it is called a high utilization ratio. This lowers your credit score, and in some cases, an over-limit charge is also levied. Try not to use more than 30 percent of your card limit.

4- Withdrawing cash from an ATM
Withdrawing cash from a credit card is the most expensive deal. Not only is there a heavy charge on it, but the interest starts immediately, and there is no grace period. Let us understand with an example. If you buy something with a credit card, then you get 30-45 days to pay for it. During this time, no interest is charged on your money. On the other hand, if you withdraw cash from an ATM, then you will have to pay heavy interest from the very first day.

5- Ignoring hidden charges
Annual fees, fees on foreign transactions, balance transfer charges and many other hidden charges are levied on credit cards. Different banks levy these charges on different cards. You should pay special attention to these, otherwise you will continue to incur losses and you may not even know about it, because most people do not check their card statements every month.

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