In a recent internal survey, we found that 31% of people ended up in a debt trap because they paid only the minimum amount on their credit card bills. Digging deeper into the data, we discovered that many people were unaware of three crucial facts that could have saved them from financial troubles.
1. Timely Payments Matter: Life can throw financial problems our way, but it's important not to miss your EMI payments. It's not just about keeping a good credit score; it's also about avoiding penalties and stopping interest from piling up over time. Even in tough times or emergencies, try your best to make those payments on time.
2. Minimum Payments Aren't a Quick Fix: When you pay your credit card bill, you might notice the option to make the minimum payment. It might seem like an easy solution, but be careful. Interest keeps growing on these minimum payments, making your debt problem worse over time. Instead of opting for the minimum, prioritize making the complete payments always.
3. Interest-Free Periods: Here's a smart move that not everyone knows about. Credit card providers often give you a period without charging any interest. When you use your credit card for transactions, whether online or offline, check if there's an interest-free period. But there’s another side to this as well, you may be tempted to make larger purchases or carry a balance, thinking you have more time to repay without incurring interest charges. This can lead to the accumulation of debt that becomes challenging to pay off and pushes you into purchasing more. So, it's very important to use your credit cards very wisely.
Understanding these simple facts can be your ticket to avoiding additional debt.
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