Having a credit card can sometimes pave the way for several unnecessary expenses, which could leave you incredulous when the time comes for you to repay them.

Read on to find out when you should not use your credit card so that you don’t to regret your purchasing decisions.

  1. Using Credit Cards to Cover Your Daily Expenses

    This is one of the most common mistakes everybody makes. While this isn’t such a bad move altogether, it will certainly be a burden on you in the long run as regular usage may result in you going over your budget and maxing out the card. So always make sure that you make a budget and adhere to it. Make calculated buys to help with your payments. Lenders like, Bajaj Finserv, offer EMI calculators to help you plan your repayment schedules.

  2. When You are Close to Your Credit Limit

    Maxing out your credit card is probably one of the worst possible mistakes you can make in your financial life because this can have an adverse effect on your attempt to improve your CIBIL scores. If you are looking for a loan due to a monetary emergency, your spending history with your credit card could get your application rejected.

  3. Shopping for Reward Points

    Credit points are one of the most popular reasons to use your credit cards, but many schemes are usually quite unnecessary. There is a strong chance that you will have spent more money than you had to, just to earn points that won’t offer much help in the long run. If you get 1 point for every hundred rupees you spend, and you need to rack up about 500 points to get rewards of up to INR 1000, the interest charged on your transactions will far exceed the credit rewards you will be offered.

  4. Paying off Another Card’s Debt

    If you have an old card with a little debt and you think ‘what’s the harm in clearing the debt with a new card?’ Couldn’t hurt, right? Wrong! While consolidating your debt sounds like a great plan, it isn’t good news for your monthly credit report. Making a habit out of doing so will sabotage your finances. If you need to pay off a loan, NBFCs like Bajaj Finserv, can offer personal loans with online approvals within minutes.

  5. When You Don’t Have a Plan

    It’s one thing when you use your credit card when you know exactly what you are doing with it and how you will repay the debt. It’s completely another when you don’t have a clear-cut plan to get rid of the debt. So, when you are stuck in such a situation, keep your card in your wallet and resist temptation.

    Having a credit card can result in you making a lot of impulsive buys, which is why you need to exercise a bit of self-restraint and be a responsible adult while using it. Try to use it only when the pros outweigh the cons. If you do have to opt for a credit card, choose one with good interest rates and rewards. Several financiers like Bajaj Finserv, offer 5 reward points for every INR 100 you spend.