New Delhi. The biggest advantage of a credit card is that the money is not debited from the account immediately, but it gets a grace period for repayment. But card holders may have to suffer a huge loss if some things are not taken care of while using it. This is because most consumers treat credit cards as a normal payment instrument, which is wrong. Also, there are some things for which you should not pay with credit card. Despite this, some people make these mistakes and regret it later.
Do not pay by credit card for these items
Recently a mail has been sent to its customers from the country’s largest bank SBI. RBI instructions have been given in this mail. RBI has banned payment of certain items through credit cards. These include forex trading, lottery tickets, call back services, betting, sweepstakes, horse racing, gambling transactions and the purchase of magazines that are banned by the government. SBI has informed its clients that some foreign forex trading merchants and casinos etc. or websites promote their products and services. Also, they want to make payment for them through credit card. But you should avoid doing so.
Action can also be taken under FEMA on payment
In fact, apart from the Foreign Exchange Management Act, 1999 (FEMA), many such rules are applicable in view of which you cannot make payment through credit card at the above mentioned places. If you do this, you may be taken with the card and you may be banned from holding the card. Also, strict action can be taken against you under FEMA.
Before getting a credit card, keep in mind the terms and conditions
If you do not have any credit card history, then before applying, get information about these things. Initially, the bank or credit card issuing company will give you a lower limit for spending. But as you use the credit card limit, your limit can be increased. Different credit cards may have different terms and conditions. So keep in mind the terms and conditions. Get details related to the card like annual fee, finance charges, transfer charges, cash advance charges, foreign transaction charges, over-limit charges, etc.
Make payment on time
If you make full settlement of your credit card loan, you will not have to pay interest, but if you do not make the payment within the stipulated time frame, you will have to pay interest on the balance amount. Usually this rate can be 30-40%. If you do not settle the full balance before the deadline and the grace period is missed, you will have to pay interest on the outstanding amount.