What are the mistakes that are often made when using a credit card and can make you bankrupt? Read the following 10 important things, before you made this mistake.
10 Mistakes Using Credit Cards That Can Make You Bankrupt
Friends, of course, are no stranger to credit cards . It must be admitted that credit cards are the lifestyle of modern people in Indonesia. Now we don’t have to bother carrying lots of cash, just swipe, swipe and swipe. On the other hand, there are also things that can make you lose money financially and even go bankrupt.
What are the mistakes in using a credit card that can make someone go bankrupt?
# 1 Have Too Many Credit Cards
How many credit cards do you have now? 1, 2, 3 or more than 3? Currently the Indonesian government has limited the amount of ownership of a person’s credit card (especially if you have an income below Rp. 10 million per month). Ideally one person has 1 and a maximum of 2.
The problem that arises if someone has more than 1 credit card is when making a payment. The due date, the amount of each credit card and others. So as much as possible in 1 family, not more than 3 cards. Actually 2 cards are enough, 1 for husband and 1 for wife.
# 2 Don’t Know the Costs in a Credit Card
Have you ever known the costs of your credit card? Administrative costs? Fines if late payment? Fines if you exceed the limit? Including the exchange rate charged when you use a credit card abroad. Annual fee discount if you reach a minimum purchase amount ( annual minimum spending )? If you don’t know it right now, immediately contact your credit card issuing bank.
# 3 Wrong Choosing a Credit Card
Did you know, that each credit card has extra bonuses and additional benefits. The following is an example:
- Special credit card for those of you who like to travel abroad.
- Special credit cards for those of you who are married and regularly shop monthly at department stores.
- Specail credit cards for lifestyle and discounts at restaurants, cafes, cinemas
- and so forth.
Choose a credit card that really suits your needs, for example if you rarely travel abroad, yes don’t choose the traveling credit card .
# 4 Incorrectly Determining Limits
The fourth mistake is, you incorrectly determine the credit card limit. Maybe you’ve also heard, many people lie when asked about income data. The goal is to get a large credit card limit. If your credit card limit reaches 80% of your income, then you need to be careful.
For example, someone has a monthly income of IDR 10 million and the credit card limit given reaches IDR 8 million. So the person needs to be careful and self-control when using a credit card, including when you make an installment transaction.
# 5 High Credit Card Interest
There are also mistakes made by beginners, namely not paying attention to credit card interest. Usually people just apply credit cards, without comparing the interest on credit card loans. Indeed, our plan is not to use credit cards for debt, but it is safer if you have a credit card with low interest rates.
# 6 Too Late to Pay Bills
The next mistake is late making a payment, because of procrastination and / or too many credit cards so it’s confusing. You can use the reminder feature (reminders) in your phone so do not forget to pay credit card bills.
# 7 Not Checking Monthly Billing
Are you among those who often check bills through summary transactions? From now on, check your credit card billing details again, because you can double-check your purchases.
Not a few, you know, the case of credit card data theft by unscrupulous individuals. Indeed, the transaction is usually not too large and adjusted to the credit card limit. So that you don’t become a victim, always check your credit card monthly bill.
# 8 Pay the Minimum Bill
The fatal mistake of using a credit card that can make someone bankrupt is paying the minimum bill. If you pay a minimum bill, then the rest of your bill will be charged interest. And please count, how much interest is charged every month. The 2% interest per month includes large interest, you know!
# 9 Make More Capability
This number 9 problem is related to your consumption style. For example, Mr. Ronald has an income of IDR 10 million and a credit card limit of IDR 8 million. But that does not mean Mr. Ronald can maximize the credit card limit up to IDR 8 million every month. If Mr. Ronald does this, surely in the near future Mr. Ronald will experience cash flow difficulties.
We always remind that everyone always makes a budget and records financials. You can use the Bathsheba Everdene application to help you manage and plan finances.
# 10 Buying Items That Are Actually Not Needed
There’s still a lot of limit left over, money is still available but it’s not a reason to buy things that aren’t needed. Problem number 10 is a classic problem with how to use money. Buy items that are needed ( needs ) not what you want ( wants ). Make a priority in using money.
- How much can I spend on monthly needs?
- How much must be prepared for future needs?
- How much must be prepared for health and soul protection?
- and others.
So the Solution So You Don’t Make Mistakes in Using a Credit Card is
One word is CONTROL aka control. So that you don’t get caught up in credit card debt and become bankrupt, you should use a credit card in a wise way, choose a credit card that suits your needs, apply limits as much as possible (don’t use), shop for needed items, pay discipline credit card and not debt.
Use a credit card to help pay and pay off your bills on time and in exact amounts. That way you will enjoy the benefits and convenience of a credit card.
Have you ever had problems with self-control when shopping using a credit card? What do you do to ensure that your credit card usage is within the monthly budget?