Top 10 Risks of Using a Credit Card

Credit Card is something which has both benefits as well as the disadvantages if you are having it. It is just the perception of the people as to how they look at it. But here we are talking about the risks that are with the owners of the credit card. A credit card can be asset to your life style but if the proper care is not taken then it can create a lot of problem too. Here are the top ten risks of having a Credit Card.

10. Credit Card Frauds

We have given the number tenth spot in our list is to the frauds that can happen with you because of the credit card that you have. You have to be very careful so as to where you use your credit card and wherever you make a transaction using your credit card. You should pay extra attention about the authentication of the payment mode. They have been many cases when credit cards have been stolen and the owner then had a very difficult time. In that case you will have to pay for the transactions that are being done by the other person. Sometimes the Credit Cards have also been cloned and used without the knowledge of the user.

9. Confusing Card Offers

This is another important thing from which you should protect yourselves. These confusing credit card offers are just another way to trap the individuals. A credit card holder easily gets attracted towards the offers that are made by the credit card companies and moreover they get indulged in those offers without reading the terms and conditions properly. And this is the main reason which leads to the problem which those individuals face in future. One should be aware of the offers that are made by these credit card companies and people should pay extra attention to its terms and conditions without getting indulged in it quickly.

8. Awkward Grace Periods

Grace period is that time period between which the user has to pay to the banks from which they have taken the credit card. During this grace period no interest rate is charged by the band from the individual who owns a credit card. But as soon as this credit grace period gets over, the bank starts charging with the interest rate they have. This interest rate varies from bank to bank. But the thing here is that some transactions have no grace period and their re payment should be done on a very urgent basis. Cash advancement and balance transfer are the example of such transaction which needs urgent payment.

7. Balance Transfer Fees

There are certain amounts of fees that are collected by the bank when you transfer money from your credit card. The credit card companies provides you with the offers that promises nominal charges but the reality is that when you actually transfer balance amount, you should be prepared to pay big. This is one of those conditions through which the credit card companies earn a large amount of money each year. With the growing number of credit card holders in the world, this is the best scope for a credit card company to make easy money and a loss to you.

6. Over Limit Fines

Credit cards have a certain limit up to which you can make the transaction. This credit limit is decided by the credit card holder and the bank official at the time when the card was actually being issued to the holder. Always keep a check on the amount that you have spent using your credit card and keep your credit card limit in mind always. If you exceed you credit card limit you are going to the pay fine which may not look good to you. Moreover then you may also have to pay the late fee if that over limit credit is not paid back in due time as per the regulation of the bank.

5. Late Payment Fines

Late payment fine is another risk which is associated with your credit card. You will have to pay more as per the rules and regulation of the bank in case you fail to make payment of the transactions that you have made to the bank. This is one of the easiest step through which the credit card companies make money. Never forget the time in which you have to pay to the bank else be prepared to pay the fine. This credit card at that time will appear to be a headache. Each bank has its own conditions on the late payment done by the credit card holder.

4. Inactivity Charges

Even if you don’t make any transactions using your credit card, you can be forced by the credit card provider to pay the charges. This is called as the inactivity charges. The user has to make transaction using his or her credit card up to certain amount as this is the only way by which the credit card companies make money. Credit card is no something to be kept as a show piece in your wallet. There are different rules and regulations of the banks and the user has to work according to that. If you don’t use your card in the time frame set by the bank then you will have to pay the inactivity charges.

3. Temptation to Overspend

Credit card can be extremely dangerous to the people who cannot control the urge of spending money. There are certain limits up to which you can make the transaction and after that you will have to pay more. If you are not good in budgeting and more often do not stop at the limits, then credit card is a kind of destruction weapon for you. When you make a transaction then it may look ok but later on it is you who has to pay back and at time you will curse no one but to yourself.

2. Unrevealed Interest Rates

Interest rate is the prime reason by which the credit card companies make money. So you are surely going to be trapped in the trap that has been set by the banks. Each bank has its own interest rate that they charge from the credit card holders in case they fail to pay back to the bank from which their credit card belongs. Generally the banks have a large rate of interest and this is a major problem for the people who fail to make payment in the given grace period.

1. Excessive Debts

An excessive debt is undoubtedly the biggest risk that can happen with the credit card holders. The entire credit card holder should pay extra attention towards the debts which they are going to face in near future. In case you fail to repay to the credit card company and the debt increases beyond a certain limit, then this is surely going to create a problem in your life. One should be extremely careful and make transaction so that at the end of the grace period they are not in much debt.

     

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