Falling In Debt? Credit Card Mistakes To Avoid Debt Crisis

Falling In Debt? Credit Card Mistakes To Avoid Debt Crisis

Payment history is a big part of one's credit report; even a mistake can have a lasting impact on one's credit report.

Tresha DiasUpdated: Monday, July 21, 2025, 03:33 PM IST
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If one pays the minimum due amount from the total outstanding amount of one's credit card every month, this method gives one immediate relief, but in reality, it puts one into debt. Interest is added to one's outstanding amount, and the total payment can be more.

If one forgets or doesn't pay their credit card dues on time, they not only have to pay late fees, but their credit score also falls. Payment history is a big part of one's credit report; even a mistake can have a lasting impact on one's credit report.

If one uses the entire credit limit available on one's card, it can worsen the credit utilisation ratio. This ratio plays an important role in one's credit score. One should not exceed 30% of one's credit limit. This sends the message that you are very wise in borrowing.

Ignoring the credit card statement that comes every month can be very dangerous. It can give rise to fraudulent transactions or mistakes by the bank. It may escape one's notice. By checking the statement on time, one can avoid any such loss.

If one applies for many credit cards at around the same time, each application is recorded as a hard inquiry on one's credit report. This can not only hurt one's credit score, but it also signals to banks that one is facing financial difficulties.

Taking a cash advance or withdrawing cash from a credit card is dangerous. A very high rate of interest has to be paid on this, and that too without any grace period. That is, the calculation of interest on the cash withdrawn from the credit card starts from the very first day. Apart from this, processing fees are also charged separately.

Many credit cards give one benefits like cashback, reward points or travel miles. If one does not pay attention to them or does not use them, then one loses the free benefits.

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