In today’s era, credit cards are just not happily accepted by everyone but are being very rapidly used across the country because of the several benefits that credit cards provide and also because of the digitalization being promoted in the country. But with benefits, comes drawbacks too. But it is not always the credit card companies because of whom the credit card users face issues. Sometimes, it is because of their own mistakes and mismanagements that credit card users have to face embarrassment in public places. However, these mistakes could be because of some problems that credit card users face and we’ll discuss the same in this article.
The very first thing to do before getting a credit card is to examine your spending pattern. Determine where you spend the most out of your earnings. Once you have realized this, choose a card from the pool of cards available that best suits your needs and whose joining fee, interest rates, annual membership, etc are affordable for you. Now to understand some biggest problems that you might face, keep reading the article:
Problems faced by credit card users
The following are some of the biggest mistakes that credit card issuers might have faced in their credit journey:
Wrong selection of credit card
Offers and cashback are a type of attraction that is provided to credit card users. On one hand, these offers and cashback do make a difference, but on the other hand, they should not be considered the only aspect of choosing a credit card. It will be of no use if you apply for a credit card that provides you with amazing rewards and offers but the interest rate charged on the payments is very high and because of this you remain in a continuous debt. An individual should opt for a credit card on the basis of his needs. There are cards that are specifically designed for specific needs such as grocery shopping, movie ticket bookings, dining benefits, etc. Interest rates, fees and charges, and other expenses related to the card should be the primary source of a selection of your credit card. Offers and cashback can serve as a good supplement to the card that you choose.
Owning too many credit cards
Credit cards can be of great help in time of need but opting for too many credit cards can make your credit profile riskier. It sometimes becomes difficult to manage multiple credit cards because you have to keep a track of the billing cycle of each card, their credit limit, due dates, etc. Also, you can become careless by owning too many cards as you might start spending unnecessarily. By overspending through your cards, you will end up being in a vicious cycle of debt, and then it becomes difficult to get out of it. Also, it will affect your credit score in a negative way. Hence, it is advisable to have only that number of cards that you can properly handle in terms of credit limit, on-time bill payments, etc.
Also Read: How Many Credit Cards Should I Have
Another major problem faced by credit card users is declined cards. It can be quite embarrassing and frustrating but most of the times it is due to the carelessness of the credit card users themselves that they have to face such a situation. The reasons behind a declined card can be –
(i) You might have forgotten to pay the bill or you might have made a late payment towards the credit card bill. It might not have been processed yet and hence resulted in a declined transaction through your credit card.
(ii) You do not have enough credit limit available on your credit card. You should have a fair knowledge of the available credit limit on your card before presenting your card for payments otherwise it would result in a declined transaction.
(iii) Another reason behind declined cards is that your activity might look suspicious. Since we have a fraud protection feature enabled on our credit cards, hence any large transaction might get declined due to this. Pre-inform your credit card company about the same to protect yourself from the embarrassment that you may face because of a declined transaction.
(iv) You can always avoid such situations by carrying some cash with you. Also, you can use Google Pay, Paytm, etc for completing your transactions. After that, you can call your credit card customer care to find out the exact issue with your credit card and take their help in resolving the problems that you faced.
Check: Reasons Why Your Credit Card May Be Declined By a Merchant
You might have an American Express Credit Card but the problem with that card is that AmEx credit card is not widely accepted and hence you might face an issue at the time of payment. Hence, you should always have a Visa or a MasterCard with you as they are easily accepted by the merchants.
International spends not activated
While on an international trip, make sure that you have activated the international spends option on your credit card through net banking. If this option has not been activated, you will face difficulties in making international payments through your credit card. Also, if you are a frequent international traveler, you can opt for credit cards that offer low foreign currency mark-up fees on international transactions done through your credit card.
Credit cards can be of great help if used in a sensible manner. You have to make a very wise decision on which credit card should you opt for on the basis of your spending patterns. A wrong selection of credit cards can lead to many problems that a credit card user will have to face. Most of the customers face problems related to high-interest rates, high annual fees, declined cards, etc while paying for their day-to-day spending. Hence, banks will also have to educate them in a proper way on the selection and usage of credit cards to prevent them from facing any issues related to credit cards in near future.