Not everyone is worthy of being able to have a credit card, so being able to have a plastic card is arguably a pride. It’s just that, after being able to get it, there are several responsibilities that must be held so that its use is not excessive and is still in accordance with the rules. Here are the bad habits of using a credit card that you should know:
Habits of Paying with Minimum Payment
One bad habit of using a credit card is to always pay credit card bills with minimum payment . This option is arguably the favorite payment option. Those who feel unable to pay off all bills directly will usually make a minimum payment so that they can still save themselves from the pursuit of debt collectors and keep their names clean in the Historical IDI. The definition of minimum payment is payment for credit card bills with only (on average) 10% of the total arrears + bills that are still not paid off in the previous month (if any).
Payment of minimum payment does indeed seem to alleviate and save. In fact, ongoing minimum payments only make the credit card owner become a debt hoarder. Usually the credit card bill payment with a minimum payment will cause the total bill to continue to accumulate, along with the interest.
Habits of Doing Swipe Tuna i
Always doing cash swipes is also included in the bad habit of using a credit card. Owner Credit cards that do this are usually deliberate so that they can get cash. This practice is made as if you were doing a shopping transaction somewhere, but actually you did not get the goods, but instead got money. Usually done to EDC machine owners or merchants. For example, you swipe a card at a merchant and as if you bought a painting for IDR 5,000,000 – in fact you did not get the painting, but cash of five million rupiah according to the price written. Of course, you will also be charged fees starting from 2-3% of the nominal you withdraw. Let’s just say that you made a withdrawal of IDR 5,000,000 and charged 3%, which means that the funds you get are only IDR 4,850,000. This whole cash swipe process will certainly hurt you, because you still have to pay the bill in the following month. The practice of cash swipe itself has also been banned by the Government. So, as much as possible do not ever swipe cash, use an ATM card to make cash withdrawals so you can save money and avoid you from a debt trap.
Too often cash withdrawal
In addition to cash swipe, cash credit card withdrawal is also one of the bad habits of using a credit card. In contrast to cash friction that is illegal, cash withdrawals are legal and allowed. It’s just that there are limits to cash withdrawals that you need to pay attention to. The process of making cash withdrawals is like withdrawing money using a debit card, so you can simply enter your card and credit card PIN, then make a withdrawal. Usually you can withdraw cash up to 60% of the credit card limit that you have. In addition, you will also be charged a cash withdrawal fee of 4%. Here is an illustration of cash withdrawal:
- Credit card limit: IDR 10,000,000
- Maximum limit for credit card cash withdrawals, for example 60% x IDR 10,000,000 = IDR 6000,000
- A conducts cash withdrawal transactions of IDR 2,000,000
- Cash withdrawal fee of 4% x Rp.2,000,000, – = Rp80,000, – So the total amount charged when printed credit card bills is Rp2,080,000, –
- If A makes a delay of one month, the bank will charge interest of 2.95% on the bill, so the payment must be IDR 2,000,000 + IDR 80,000 (2.95% x IDR 2,000,000) = Rp.2,139,000, –
Always Spending Credit Card Limit
The bad habit of using the next credit card is to always spend credit card limits. This is made worse if the credit card owner shop without taking into account the ability to pay. The worst thing that can happen is the inability to pay bills, as well as arrears in payments. The side effects are, of course, the name of the card owner that can be recorded by Bank Indonesia, and affects the bad IDI Historical score. The use of credit cards should be used for promotional purposes only so that you can get a discount in any payment. However, if it is used for shopping, then at least use a maximum of 50-60% of the limit you have.
The impact of the use of credit cards to the maximum extent is the possibility of card owners who are unable to make payments so they experience delays. This can also happen to those who often forget to make payments in a timely manner. Delays in making credit card bill payments can have the effect of: the cost of late fees that must be paid, as well as the interest that accumulates on your total credit card bill. To overcome this, card owners should limit the use of credit cards to a maximum of 50-60%. For those of you who often forget to make a payment, ask the bank to activate auto debit from a savings account to a credit card bill. This can minimize delays, so as to avoid fines or interest that accumulates.