How I can save from Credit card debt: Useful & Effective Tips

Those who own credit cards also carry the risk of getting into the trap of credit card debt. Yes, it is very easy to get into the trap of credit card debt, and the best part is you don't even realize that. But, it is also true that when it comes to credit card debt, it is a universal fact that nobody likes that as it can be difficult to repay the same. So, you must be wondering about the best possible ways through which you can save yourself from falling into the trap of debt. Read this article below to find out the useful tips & tricks that will help in saving you from credit card debt:

1. Be Ready with Extra Savings

Many people fall into the trap of credit card debt just because they don't have enough cash to pay their debts. As a result of which they are forced to put the charge on their card. Thus, in order to avoid this situation, it would be great if you are always ready with some extra emergency funds, i.e. savings so that you can easily pay for your expenses on time without facing the late payment charges.
2. Avoid Things That You Can't Afford

Many times people due to peer pressure or in order to maintain their status in the society, but such expensive things which they really can't afford. They don't give a second thought to it, considering that they need to pay back the same later. So, one should always avoid buying such things which are going out of his/her pocket or budget. It is a smart move to purchase only what you can afford so that you can easily pay for it later without falling into credit card debt.

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3. Say No to Balance Transfer
Yes, a balance transfer is a big no! Try to avoid doing this, until and unless you have a good reason for doing that. Do not do balance transfer just for the sake of it. If you want to transfer the balance to another credit card, make sure that it makes sense, like it comes to you with lower interest rates than the previous one. Otherwise, your balance will only increase due to the balance transfer fee. Yes, there are some lenders who charge a balance transfer fee from the customers. So, it's better for you to say no to balance transfer so as to avoid the credit card debt.

4. Don't Miss Your Credit Card Payments
One should always pay all his credit card payments in a timely manner as it is surely one of the most effective ways to avoid the credit card debt. If you find it difficult to remember the due dates to make the payments, you can set a reminder in your phone regarding the same. Yes, with the help of doing so, you can stay away from making the credit card debt and will clear all your dues on time.

5. Try to Pay Full in Each Month
The best way to avoid credit card debt is to pay your balance in full each month because through this way, you will never carry a balance with you. With the help of doing so, you don't need to worry about whether you can meet the minimum payment or not because your credit card has already been paid in full. So, you should try this method so as to keep the credit card debt away.

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6. Never Take Cash Advances
If you want to avoid debt in the real earnest, make sure you avoid withdrawing cash via credit card at the ATMs. Withdrawing cash can shoot up your credit card bill as the interest rate on the same normally falls within 2.5%-3.5% of the withdrawal amount. For example-Cash withdrawal charges from the HDFC Bank credit card comes out to be 2.5% of the withdrawal amount or Rs 300, whichever is higher. Suppose you withdraw Rs 40,000 from the credit card at the ATM, then what will be the interest charge? Interest amount will be Rs 1,000 (40,[email protected]%), higher than the minimum amount of Rs 300 to be levied by the bank. So, you can get an idea of how the menacing cash withdrawal via credit card can be to your finances. Avoid taking cash advances to negate the possibility of mounting debt on your credit card.

7. Don't Give Your Credit Card to Others
So often people give credit card to their friends or family members and end up worsening their financial life cycle. When someone gets your credit card, chances are high that he/she may misuse it by making lavish shopping. As a result, the bill, which will come up can take your breath away and give you sleepless nights. So, never fall into the request of others asking you to give your credit card to them. Denying them your credit card will help you avoid from getting financially drowned.

8. Be Aware of the Terms and Conditions
Read the terms and conditions related to your credit card carefully and try to understand each and every point in detail so that you could avoid the debt to rise. Keep an eye on the application of interest on your credit card account, the stuffs that will lead to a charge. Also, you need to understand as to when will interest rate move up. The moment you know all these, you can take proactive steps to avoid the debt to crop up and lead a healthy financial life by doing the same. Some of the common mistakes you should avoid are paying only the minimum due amount, making late payment of the bill, taking cash advances, doing unnecessary shopping, etc.

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9. Avoid Having Multiple Credit Cards
Doesn't matter how fancy credit cards can be, use them judiciously to be on the safe boat. Else, you will get financially drowned with no one to take you out of that situation. Judicious use is practically impossible when you have more number of credit cards, which can inflate your bill to the maximum extent. There are banks and NBFCs that could tempt you to buy a credit card on the back of your good credit history. But, you can honour their request at your own peril. Never fall into the lure of multiple credit cards as you can land up nowhere.

Table showing interest rate & late payment charges of different banks:

Bank NameInterest Rate Late Payment Charges 
State Bank of India3.35% per monthRs.100-750
ICICI Bank3.40% per monthRs.100-700
HDFC Bank3.40% per monthRs.100-700
Kotak Mahindra Bank3.5%-3.50% per monthRs.100-700
Axis Bank2.95%-3.25% per monthRs.100-700

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Personal Loan Interest Rates October 2023
Fullerton India12.00% - 24.00%
HDFC Bank10.75% - 14.50%
ICICI Bank10.75% - 19.00%
IndusInd Bank10.25% - 26.00%
Kotak Bank10.99%
RBL14.00% - 23.00%
Standard Chartered Bank11.49%
Tata Capital10.50% - 24.00%
Home Loan Interest Rates October 2023
Axis Bank8.75% - 9.15%
Bank of Baroda8.50% - 10.60%
Citibank8.75% - 9.15%
HDFC8.50% - 9.40%
ICICI Bank9.00% - 9.85%
Indiabulls Housing Finance Limited8.65%
Kotak Bank8.85% - 9.40%
LIC Housing8.50% - 10.50%
Piramal Capital & Housing Finance10.50%
PNB Housing Finance8.50% - 10.95%
Reliance Home Finance8.75% - 14.00%
State Bank of India/SBI9.10% - 9.65%
Tata Capital8.95% - 12.00%