Your financial life can change significantly depending on the way you use your credit cards. If used wisely and with discipline, they can provide a number of benefits and even help you out of a tight spot financially when you need extra money. But on the other hand, if you use your AU Bank credit card carelessly, you run the risk of getting into debt and having to pay hefty fees and penalties as well, which is levied by the card issuer.
That is why the warning signs listed below must be understood, as they show that you are misusing your AU altura Credit card.
Always making minimum monthly payment due on credit card
Cardholders frequently decide to pay only the minimum amount due if they are unable to make timely full payments. By making only this small payment by the due date, cardholders can avoid a late payment fee on their account, which is typically 5% of the total amount due. On the outstanding balance of the credit card account, financing fees are still assessed, which in some cases can be as high as 47–48 percent a year.
Additionally, if you frequently roll over your credit card debt by only paying the minimum amount due each month, you run the risk of falling into a debt trap. This is due to the fact that doing so would incur high finance charges and other costly fees.
If you are having trouble paying off your AU Bank credit card debts in full, take into account options like having large purchases converted into EMIs, applying for and checking the status of credit cards, or converting the entire outstanding balance amount into EMIs.
You might also think about selling your low-yield investments to pay off your credit card debt or taking out a loan against your long-term investments to leverage them, provided your long-term financial goals are not jeopardised. The associated interest cost is significantly less than AU altura Credit card finance fees.
Maintaining above 30% credit utilisation rate
The percentage of your total AU Bank credit card limit that you have used up to that point is the ratio in question. Because credit bureaus frequently interpret a credit usage ratio of more than 30% as a sign of credit hungriness, keep your spending within this range. If you go over this limit, credit reporting agencies have the right to lower your credit score a few points. If your credit utilisation ratio frequently exceeds this limit, you should either request an increase in your credit limit from your card issuer, or you should think about switching to a different credit card by applying for one and checking on the status of your application frequently. Your credit utilisation ratio can be reduced if you don’t increase your spending after getting a credit card with a higher limit or a second AU altura Credit card.
Wasting the interest free duration
Additionally, most cardholders overlook the chance to benefit from interest-free periods when using their cards responsibly. The time period between the date of the credit card transaction and the due date for payments is known as the interest-free period. If you are able to pay off the entire balance on your AU Bank credit card within the allotted time, the credit card company will waive interest charges during this time. This period typically lasts between 18 and 55 days, depending on when your transactions were finished.
You should plan any significant credit card purchases to occur at the start of your billing cycle to maximise the number of interest-free days available to repay them in order to make the most of this interest-free period. Instead, you might think about spreading out your purchases so that the majority of them happen at the start of each card’s payment cycle if you have several credit cards with various due dates. If the issuer of your current credit card offers a shorter period or decides not to extend it, you should also apply for a different credit card with a longer duration. After that, monitor the application status to learn when your new credit card will be approved.
Using credit card to make an ATM withdrawal
Customers frequently make the error of withdrawing funds from their accounts while using aAU Bank credit card. Such withdrawals are subject to finance charges from the date of withdrawal to the date of repayment, in addition to a cash advance fee of up to 2.5 percent-3.5 percent of the withdrawn amount. Consequently, using aAU altura Credit card to purchase cash should only be done as a last resort. If you find yourself in this situation, keep in mind to pay back the full amount borrowed as soon as you can to avoid accruing finance charges and a cash advance fee.
Not thinking about reward expiry
You must keep track of your reward points in the same way that you check online or with customer service to learn the status of your credit card application.
Along with marketing perks like free movie tickets, free access to airport lounges, and waived annual fees, one of the most significant advantages that credit card issuers highlight when marketing their products is the availability of rewards programmes. After earning reward points, you can use them for a variety of things, including purchasing gift cards, airline miles, or other items.
However, bear in mind that most credit cards have a predetermined expiration period for these points, which is typically between two and three years, while using your credit card and accumulating reward points. You won’t be able to use these reward points after they’ve passed their expiration date, depriving you of the benefits that would have been provided if you had used them earlier. Before enrolling, users should carefully read the terms and conditions of the AU Bank credit card‘s reward point programme and make sure to use their reward points before they expire.