7 credit card sins you must avoid at all cost. ...

7 credit card sins you must avoid at all cost. Check the content

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Sin #1: Compromising card details

Sin #2: Failing to pay on time

Sin #3: Paying only minimum due

Sin #4: Withdrawing cash

Sin #5: Utilizing full limit

Sin #6: Spending to earn rewards

Sin #7: Closing cards randomly

Read more at:

https://economictimes.indiatimes.com/wealth/bor...

25 Comments  |  
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am utilizng more than full everytime

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//Sin #6: Spending to earn rewards//
biggrin

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Sin 8- keeping card ideal without spending

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prabha.avum wrote:

am utilizng more than full everytime

Yeah. Read below comment.

“High credit usage portrays the user as credit hungry with a potentially higher chance of default. This adversely affects your credit score and may make it difficult for you to access additional credit facilities.” laughing

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TEMPER wrote:

//Sin #6: Spending to earn rewards//
biggrin

Don’t use credit cards only to earn points stuck_out_tongue

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kirandr221996 wrote:

Sin 8- keeping card ideal without spending

That is obvious stuck_out_tongue

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TEMPER wrote:

//Sin #6: Spending to earn rewards//
biggrin

Instead shift all your cash and debit card spendings to Credit card. This way you will earn more reward points and also not overspend to get more rewards.

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prabha.avum wrote:

am utilizng more than full everytime

Cibil: am I joke to you. stuck_out_tongue_winking_eye

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say baba…. cibil is good

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kirandr221996 wrote:

Sin 8- keeping card ideal without spending

How does this affect credit score?

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schumacher wrote:

How does this affect credit score?

Does not affect credit score directly but if not used for a long time then chances are that the card may be blocked by the credit card issuer and if it turns out that it was one of your oldest cards then the average age of your credit history will be affected and this in turn will affect your credit score.

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watever wrote:

Instead shift all your cash and debit card spendings to Credit card. This way you will earn more reward points and also not overspend to get more rewards.

Can u please elaborate?

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hgoel42668 wrote:

Can u please elaborate?

If someone uses cash or debit card to buy something then he can instead use credit card to do the same transactions. By doing this he can get cashback/rewards as per the credit card he holds. Once the credit card bill is generated pay off the entire bill.

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watever wrote:

If someone uses cash or debit card to buy something then he can instead use credit card to do the same transactions. By doing this he can get cashback/rewards as per the credit card he holds. Once the credit card bill is generated pay off the entire bill.

But someone mentioned we should not use full limit

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hgoel42668 wrote:

But someone mentioned we should not use full limit

Nobody is asking you to max your credit limit.

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My card limit is 30k and I use whole 30k daily and repay same day.
I am doing this for 3months
And now my cibil is 860+
Edit- I got card with just give 600 cibil

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watever wrote:

Does not affect credit score directly but if not used for a long time then chances are that the card may be blocked by the credit card issuer and if it turns out that it was one of your oldest cards then the average age of your credit history will be affected and this in turn will affect your credit score.

How often would you suggest using it to avoid it from getting blocked? And, does it differ if it’s a paid card-cause then the issuer will not worry cause they are earning anyway?

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prabha.avum wrote:

am utilizng more than full everytime

Same Here Bhai…..

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Fortunately, I don’t do any of these. I don’t use the card just for reward points.

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Roushh wrote:

Fortunately, I don’t do any of these. I don’t use the card just for reward points.

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kirandr221996 wrote:

My card limit is 30k and I use whole 30k daily and repay same day.
I am doing this for 3months
And now my cibil is 860+
Edit- I got card with just give 600 cibil

Daily transactions are not reported to cibil or any other bureau. Only statement balance and settlement history.

If you utilise and payoff the balance same day then your credit utilization should be almost zero. What does the cibil report says about your credit utilization ?
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indiansoul wrote:

Daily transactions are not reported to cibil or any other bureau. Only statement balance and settlement history.

If you utilise and payoff the balance same day then your credit utilization should be almost zero. What does the cibil report says about your credit utilization ?

Oh that is the reason why my credit boosted

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hgoel42668 wrote:

But someone mentioned we should not use full limit

Of course, you can use full limit for your card but there is more…

There is credit utilization and there is maxing out card. Both are different things and credit utilization ratio is most important for CIBIL. Now let me explain the difference between these two.

Maxing out card means, you are using full credit limit of your card. For example, if you have 50k limit on your card and you are using 50k each month to buy something.

Credit utilization is how much you use your credit across all credit cards you hold. For example, if you have 2 cards (SBI with 50k limit and ICICI with 50k limit). Now if you use only ICICI and max it out then you have used 50k from your total account credit limit of 1L. So your credit utilization ratio is 50%. That’s not bad even if you are maxing out one of your card.

Now if you only hold 1 card then your credit utilization and maxing out your credit card means same. So in that case, using full limit each month is a bad indicator that you are credit hungry and that you are not good at managing your finances.

So moral of the story is that maxing out credit card is not necessarily bad. Maxing out credit utilization is bad for credit history.

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schumacher wrote:

How often would you suggest using it to avoid it from getting blocked? And, does it differ if it’s a paid card-cause then the issuer will not worry cause they are earning anyway?

If it’s a paid card then i usually fulfill the spend based waiver target. If it is a lifetime free card but not getting any offer on that card or if it is an old card then i just do a small transaction of Rs100 or 200 once every two months and pay it off soon too. But i still think they might inform you before deactivating your card for non usage, but you never know so why take risk, just do small transactions and pay it immediately.

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