Nowadays, everyone uses a credit card for cashless transactions. Facilities like easy EMI, discounts, and reward points have made it more popular. But if it is not used properly, then this card can be heavy on your pocket.

Many times, people take such steps in greed for benefits, which later become a big loss. Interest rates are very high, and late payment can also spoil the credit score (CIBIL Score). Therefore, it is wise that some work should never be done with a credit card. Let us know 5 such works that you should not do with your credit card.

1- Do not make the mistake of withdrawing cash from an ATM

While selling all the credit cards, from the bank to the agent, they definitely tell you one special feature of it that with its help, you can withdraw cash. However, they do not tell you that the cash you withdraw will be charged a hefty interest from the very first day. This interest can be 2.5 to 3.5 percent per month.

At the same time, you also have to pay a flat transaction tax. On one hand, you get a month's time to pay the bill for shopping done with the credit card, and if you do not pay the bill by the due date, you are charged interest. On the other hand, you do not get any time to pay the cash withdrawn from the ATM, and interest starts being charged.

2- International transactions can be costly

One of the features of every credit card is that it can be used abroad as well. Many people are attracted to this feature of the credit card, but many people do not understand the story behind it. When using the credit card abroad, you have to pay a transaction fee, which keeps increasing and decreasing. By the way, if you want to use a card instead of cash abroad, then you can use a prepaid card instead of a credit card.

3- Use in balance transfer
Many credit cards have a feature called a balance transfer. Using this, you can pay the bill of one credit card with another credit card. It may sound very amazing that you get 30-45 days to pay the shopping bill on one credit card and then pay the first one with another credit card, in this way, you will get 2-3 months to pay the shopping bill.

However, let us tell you here that balance transfer is not free; you have to pay a fee to the credit card company or bank. It has another big disadvantage. A credit card is a kind of loan. In such a situation, if you pay the bill of one credit card with another, then it means you are taking another loan to settle one loan. In an emergency, when you have a great shortage of money, then there is no problem in transferring the balance, but do not make it a habit. Doing this too much will have a bad effect on your CIBIL score.

4- Spending beyond the limit
It is a big mistake to use the full credit limit of the credit card repeatedly. If you spend 80-90% of your limit, then the banks believe that you are more dependent on debt and are unable to control your expenses. This lowers your credit score, and it may be difficult to get a loan or a new card in the future. The right way is to use only 30-40% of the limit. For example, if the limit is 1 lakh, then do not spend more than 30-40 thousand. By doing this, the score will be good, and the burden of interest will also not increase.

5- Making too many EMIs
It is not wise to buy small things on EMI. By buying items like a mobile, headphones on installments, you have to pay more interest and charges. Many times, processing fees or hidden costs are also added to the EMI, due to which the goods become more expensive than the actual price. Apart from this, taking EMI continuously can also spoil your monthly budget and increase the debt burden. Therefore, use EMI only for necessary and big expenses, not on unnecessary things.

Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.