10 essential precautions for safe credit card use

A credit card is a loan facility provided by a bank or financial institution. It allows users to shop or pay bills within a set limit, with the requirement to repay the amount within a specific timeframe.

Before using a credit card, you must understand the bank-defined credit limit, billing cycle, and the payment deadline, known as the due date.

Generally, if you pay the entire bill within the scheduled time, you do not have to pay any interest. However, failing to pay the bill on time can lead to the addition of interest and late fees.

During shopping, you should use the card only for necessary expenses. It is not advisable to spend beyond your ability to repay. Many banks offer the facility to purchase products through installments (EMI).

However, you must learn the EMI terms and additional charges beforehand.

While it is possible to withdraw cash from an ATM using a credit card, a practice known as a cash advance, it is better to avoid this facility except in an emergency. This is because banks usually deduct high interest and extra fees for such transactions.

Ensuring card security is also essential. You must not share the card’s PIN, CVV number, or OTP with anyone. When performing online transactions, you must use safe and trusted websites. If you lose your card or notice suspicious transactions, you should contact the bank’s helpline immediately to block the card.

You should regularly monitor SMS or app notifications for every transaction. Compare these with your monthly statement, and if you find any discrepancies, inform the bank quickly.

Through proper planning and timely bill payments, you can use credit cards safely. This reduces the need to carry cash, provides financial advantages during emergencies, and often makes it possible to enjoy benefits like cashback, reward points, and various discounts.