Hefty late payment fee of 30 to 36 per cent annually

If you have missed a credit card payment the interest rates could be anywhere between 2.5 per cent to 3 per cent a month. That's a whopping 30 to 36 per cent every year. Before you realise your interest amount outstanding would be the same as the principal amount.

Again a charge of 30 per cent on amount of limit exceeded

You are charged an interest rate of 2.5 per cent per month if you cross your credit limits. This is again a whopping 30 per cent annually on the extra sum. Moreover, your credit rating also goes for a toss.

Annual charges are not waived every year

If you are naïve and apply for a credit card thinking that there are no annual fees, be careful. In fact, in most cases the annual fee is waived only in the first year or if you spend a certain sum.

Rating maybe affected

If you default in your credit card payments your credit rating gets affected. This means you may not get another loan, as your credit rating dips.

Try avoiding a credit card in the first instance

If you are inclined to spend, its best to avoid credit cards.