In case you’ve ever learn or watched Vikram and Betal, you understand how the story goes. King Vikramaditya is requested to carry again a ghost named Betal from the forest. Betal hangs the wrong way up from a tree, and every time Vikram lifts him onto his shoulder, the ghost begins telling a narrative.
Each time he will get shut, Betal tells him a riddle. And right here’s the trick. If Vikram is aware of the reply and stays silent, his head will burst. So he’s pressured to talk. And the second he does, Betal escapes, flies again to the tree, and the loop begins over again.
Now, think about your bank card invoice as that Betal.
Let’s be sincere, bank cards are a type of issues that really feel each highly effective and harmful. It’s very handy but in addition tremendous straightforward to mess up.
In case you’ve ever carried a steadiness or paid the invoice with late charges, you recognize what I imply. It begins small, however when you’re not cautious, the debt grows. And earlier than you recognize it, you’re caught making simply the minimal fee each month, and the excellent won’t ever go down.
Like I discussed, it’s highly effective as effectively.
The great aspect of Bank cards.
You stand up to 45 days of curiosity free credit score so long as you make the total fee by the due date.
In case you’ve been making constant funds on time, it helps enhance your CIBIL rating. That’s helpful when you ever want a house mortgage or any form of credit score sooner or later.
Each rupee you spend earns you reward factors, 1+1 film tickets, airport lounge entry, and all these tempting gives. Although sure, they’ll lure you into spending extra, too.
It may be a rescue backup throughout a real money crunch, like these month-end bills when the wage hasn’t hit but.
Bear in mind, this solely works when you’re disciplined with the funds.
The place do issues often slip?
Paying simply the minimal due: In all probability the worst entice. I went by this myself throughout my early profession, 7–8 years again. Just a few of my pals are nonetheless caught and really feel helpless. Paying the minimal helps you keep away from a late charge, however the remaining quantity begins accumulating curiosity, often 3 – 4% monthly. That’s virtually 40% a 12 months.
Revolving credit score: That is the second Betal will get snug. You suppose you’ve answered him for now by paying simply the minimal in your invoice. However he doesn’t depart. He hangs round quietly, and subsequent month he’s again with curiosity. Any new swipe you make additionally begins getting charged curiosity from day one. Which means your free credit score interval is gone.
Lacking the due date: In case you miss the due date, you get hit with a late charge, often round 1000 to 1500. You additionally lose the free credit score profit, and now you’re paying curiosity on the total quantity. And your credit score rating takes successful, too. One small miss, and Betal makes certain it doesn’t go unnoticed.
Hidden fees: Some playing cards include annual charges. Some cost further whenever you convert a spend into EMIs. Then there are fees for swiping overseas or withdrawing money from an ATM. These don’t at all times present up upfront. Betal loves hiding within the wonderful print.
Maxing out the credit score restrict: In case you typically use greater than 30 to 40% of your credit score restrict, it’ll slowly pull down your credit score rating. It additionally exhibits that you just’re relying an excessive amount of on credit score and never managing spends effectively.
Zero value EMIs: It feels like a candy deal, however right here’s what actually occurs. The product worth is typically made larger only for EMI consumers, so that you would possibly find yourself paying greater than somebody who pays all of sudden. Even when they are saying no curiosity, they add charges and GST.
Learn how to keep out of the Loop?
Pay the total quantity, not simply the small minimal, or the leftover will continue to grow.
Activate autopay so that you don’t neglect and get charged late charges.
Spend solely what you have already got, otherwise you’ll find yourself in a large number later.
Know your billing cycle so that you don’t pay curiosity on one thing you simply purchased.
Examine your assertion each month. Some shady bank card gamers embody hidden fees.
Keep away from money withdrawals. You’ll be paying further from day one, and truthfully, it’s not price it except it’s an actual emergency.
Stick to 1 or two playing cards. Too many simply makes it messy and simpler to lose monitor.
What when you’re already caught within the loop? Feeling helpless?
Actually, the one manner out is to cease utilizing the cardboard until you clear your dues. Which means reducing your life-style a bit and chopping again wherever you possibly can. Perhaps you don’t have to be consuming at that fancy restaurant. Darshini does the job. If there’s one thing mendacity round that you just don’t care about anymore, promote it and use that to cut back the debt.
Speak to the financial institution. A private mortgage with decrease curiosity is manner higher than letting bank card debt continue to grow. No less than you’ll have a hard and fast EMI and know when it’s all going to finish.
You can even attain out to somebody shut, a good friend or a member of the family. Who is aware of, they could truly assist. However yeah, maintain this as your final possibility. When feelings are concerned, there’s at all times an opportunity of issues getting awkward or being taken without any consideration.
That mentioned, asking for assist whenever you want it’s by no means a foul factor. 
PS: Not attempting to villainise bank cards. They’re lots like Betal within the tales, not evil, simply difficult and intelligent. They maintain coming again with a riddle, and it’s on us to determine reply.
