How to use credit cards efficiently without falling in a debt trap? Key tips to remember

Soon after you get your first salary, you might want to get access to money on credit to be able to buy beyond your immediate means. For instance, if your credit card limit is Rs 3,00,000 and credit expenses amount to Rs 2,50,000 – then you would exhaust 83 percent of your credit limit. Instead, if you raise the credit card limit to Rs 5 lakh -- then credit utilisation declines to 50 percent. On an outstanding amount of Rs 10,000, extra interest comes to Rs 3,600 – which you could have avoided if the credit card balance were cleared every month -- and not just minimum balance. When you start to feel that your credit card debt appears to be very high, try to curb your expenses and pay the outstanding bills first before making any new purchase on credit.