5 Common Credit Card Mistakes to Avoid
5paisa Research Team
Last Updated: 01 Jan, 2025 12:27 PM IST

Content
- 1. Choosing the Wrong Credit Card for Your Needs
- 2. Missing Payments of Credit Card Bills
- 3. Making Only Minimum Payments
- 4. Taking Cash Advances and Spending on Unnecessary Things
- 5. Overspending Using Your Credit Card
- Conclusion
Using credit cards unwisely can have lasting repercussions on your money situation. From choosing the wrong card to failing to pay on time, even minor mistakes can lead to hefty interest charges and debt buildup. But you can steer clear of these pitfalls with some discipline and know-how.
Read on to uncover the five most common credit card pitfalls people face and how to avoid them. By adopting some better practices, you can reap the rewards of credit cards without falling into any expensive traps.
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Frequently Asked Questions
Five tips for effective credit card use are
1) Pay your balance in full each month,
2) Choose a card aligned with your spending habits,
3) Keep credit utilisation below 30%,
4) Set a budget for credit spending,
5) Review statements regularly for errors or fraudulent transactions.
Yes, credit card companies can make account errors, leading to incorrect interest charges, late fees, or fraudulent transactions. Always verify new charges and thoroughly review statements monthly. Report any discrepancies immediately to rectify mistakes.
Contact your bank and credit card company when you realise the error. For small discrepancies like Rs.10,000, your bank may make an automatic adjustment. You'll have to initiate a payment trace for larger mistakes, providing information to help identify the errant transaction. This process can take up to 90 days for resolution. Set up alerts and confirm payment details to avoid sending future payments to the wrong account.