The pandemic has cast an impact on all in some way or the other and if estimates are to go by nearly one-third of India's urban class will run ont of their lifetime savings by June end amid this crisis. In such a situation if you have a credit card or an overdraft limit at your disposal you can be among lucky few as it can help meet your regular expenses. But here we suggest some strict do's to follow while using credit card amid the pandemic:
1. Do not opt for EMI option on credit card dues:
It is when you make big ticket purchases using your credit card that credit card issuing companies entice you through a deal of converting the dues into EMI mode. But this is not at all rewarding and instead you end up paying higher for no gain. Detailing here there are some of the cost you would then need to bear such as your credit card limit will be blocked to the extent of the purchase amount, one-time processing charge that includes interest component shall also be charged.
2. Don't have too many credit cards; instead consolidate your credit card debt:
With more of credit cards while there may be a urge to spend more there shall also come with them the responsibility of making repaymnets by the due date and also keep a track of all such deadlines. And so to simplify and also to lower your debt one can consider consolidating the different debt including credit card accounts into one monthly payment.
But here one needs to be highly diligent as it sometimes may lead you to pay a higher amount by consolidation of the debt into another loan account.
Consolidation is considered by banks if you have a good track record in terms of financial credibility as well as have the limits.
3. You can use your accmulated reward points on the credit card:
The reward points that have been accumulated can now be used in current crisis-ridden times for various purchases including for essentials allowed and also for making credit card dues payment.
4. Be alert on the catch that comes with availing moratorium on credit card:
Similar to retail loans, credit card repayment has also been offered relief now until August 31, 2020. But the interest for the deferred timeline i.e. six months together with the already overdue amount has to be cleared after the end of moratorium. Further another pointer that needs your immediate attention is that for purchases made using the credit card while moratorium is availed, interest will begin to accrue immediately instead after the otherwise allowed credit window.
5. Don't misplace your credit card:
At this junction you need to be all the more careful while handling and safekeeping your plastic money as other than the security aspect there is this issue of minimal staff being present at most companies. And so you shall not get the replacement so easily and in a timely manner. Also, as with liquidity crisis there has been revealed an increase in credit card frauds, do extremely vigilant and don't reveal your personal credentials linked to credit card, OTP etc just to anybody.
6. Check with your banks for any unauthorized debits from your account:
Your credit card statement should be reviewed by you month on month and amid the pandemic there can be a case that you find unauthorized charges on your credit card usage such as card fees etc. insists on banks that they cut just the regular charges and refrain from authorizing any such deduction over phone call from credit card rep.