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  • Diagnosing Credit Card Addiction. When to Say, No!

    India is comparatively at a better position when it comes to credit scores for people in terms of debt and repayment of bills, as compared to a lot of other countries but there is equal risk. The buying power of Indians has drastically increased through credit cards but it does not mean that we have more money considering inflation at the same time. It is vital to maintain a good credit score or CIBIL score for individual financial independence because all financial products and their eligibility are linked with each other. One extremely alluring but hazardous to personal finance are credit cards if misused or in other words carelessly used.

    Top 7 Signs of Credit Card Addiction

    You know you need to control your credit card usage when:

    1. When You Reach the Credit Card Limit, Often: Of course, financial emergencies are exactly the events when the credit card is actually a useful financial tool. But one cannot let financial emergencies or any other reason, no matter how fair it sounds in your head lead you to reach your credit card limit regularly. Also, a maxed out credit card it useless when financial emergencies actually crop up. Hence, it is necessary to maintain a pattern of credit card usage that gives you enough buffer for any sort of financial emergencies and also to maintain a good credit score regardless of timely bill payments. When you reach your credit limit often, it also negatively to one’s CIBIL score affecting your chances of using other financial aids such as loans.
    2. Too Many Credit Cards: One can never run short of new credit card offers with the latest trend being pre-approved credit card. Even though you can buy more with multiple credit cards, your income is not doubling anytime soon. Even if does credit cards, means having to may more interest and further headaches of bill payment.
    3. Savings Depletion, Regardless of Increasing Income: Savings decreasing with credit card usage is one of the most common symptom for credit card addiction. This jeopardises both your current finance and also future income.
    4. When You Are Borrowing Money to Make Credit Card Bill Payments: This is an alarming occurrence and it is this moment when you need to give that plastic card rest. It not only puts you on double debt, with no savings for the future but leads to unnecessary headaches and often jeopardising your future survival leave alone fulfilling future plans.
    5. Being Secretive Credit Card Bills: This symptom has effects on your family and people who are close to you on an emotional or level of trust but an also symptom that you might using the credit card too much or misusing it. On the other hand your family being in aware of your debt does not help.
    6. Minimal Bill Amount Being paid: the minimal bill payment amount can be nuisance because the rate for your next bill is calculated with compound interest on the top of your prior bill for the coming month. It not only makes you pay more but might lead to a number eventually to a number that might cause bankruptcy. But the minimal damage, minimal bill amount payment over a period of time affects your CIBIL score negatively. This further leads to closing all the other avenues for financial help such especially loans.
    7. Giving Up Long-Term Dreams For Short-Term Happiness: This is the most damaging symptom when you start sacrificing larger dreams for buying small-term happiness with your credit card. Even if you are not in debt you are sacrificing your bigger wants for financial restrictions caused by your credit card bill payments.

      Hence, it is important to control credit card usage not only for your CIBIL score but the further implications that credit card addiction has in your life.

    CIBIL Related Articles

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