Top on the long list of things that annoy me, are wife “jokes.” I put the word jokes in quotes because none of them are remotely funny, especially not the ones that assume that the sole purpose of a married woman’s life is to spend her husband’s money. It was only a few days ago that I received this ‘joke’ on a whatsapp group, which went – “My wife’s credit card got stolen, but I didn’t report it because the bill now is far less than it used to be.”

Do you know what’s worse than this joke, though? Actually making mistakes with the way you use your credit card. Women are so easily criticised and stereotyped even for the smallest financial mistakes, so it is important to be aware of what’s going on in your wallet (it’s also important because this is your hard-earned money that we’re talking about).  

Here are five mistakes that you should avoid while using your credit card.

Having more than one credit card

Yes, that salesperson was very convincing, and very annoying, and the only way you were able to shut him up was by accepting his offer for a credit card. Having more than one credit card, however, is a bad idea, because it encourages spending by giving the illusion of more credit. Splitting your expenses over two or more credit cards doesn’t make your credit card bills smaller – you’re still spending the same amount, and worse still, you’re losing out on accumulating benefits under one card.

Not surrendering extra cards  

Every card attracts service charges, that are added to your bill, irrespective of whether or not you use the card. So, you might think you’re doing fine by just not using the extra card, but there will be charges levied on your card. It is important that you surrender your credit cards by calling the banker and informing them that you don’t want the card, and that you’d like to surrender it. You might have to write a letter or two, but that is very little effort compared to the relief that you’ll get when these cards go away.

Paying arbitrary amounts instead of the actual bill

I used to have a client who liked paying only ‘round’ figures – if the bill was say, Rs 5,437, she would pay Rs.5,500/-, or Rs.5,400/-. Remember that if you pay extra, you’re losing out on money that you could have potentially earned interest on in your savings bank account, and if you pay in deficit, the card company will charge a hefty interest on it. Pay exactly what the bill asks you to pay to avoid this lose-lose situation.

Paying only minimum balance

Credit card companies love luring young professionals into believing that they have more money than they actually do by providing generous credit limits to enable impulse shopping sprees. The interest charges on deficit credit card payments are immense, so you’ll be neck deep in payments before you know it. Avoiding this is simple – just don’t spend money that you don’t have.

Falling into the EMI trap

There’s a reason why every e-commerce website has an ‘EMI’ option – it’s extraordinarily profitable for the bank! While it might be a great relief during emergency purchases, using the EMI option to fuel your wants is a terrible idea. Credit card companies often advertise EMI interest rates to be ‘as low as 1%’, but the truth is that it is 1% a month, which works out to a whopping 12% a year, not to mention GST on top of it.  

Credit cards are excellent financial tools – they have a host of advantages, like the ability to give you breathing space, money-wise, and the fact that it’s ideal for online transactions because of how easy it is to reverse transactions. However, if you aren’t going to be prudent with how you use them, they may well become your worst nightmare.