If you use a credit card, do not make these 8 mistakes! You will be hit twice as hard, and you will get upset while handling it.

Do you use a credit card? Know the 8 big mistakes that can ruin your CIBIL score and trap you in a deep debt trap. Understand everything from the dangers of Minimum Due and Cash Withdrawal to the credit limit.

In today's digital world, a credit card is not just a piece of plastic; it has become an important part of our lives. From online shopping to paying bills, it gives us countless conveniences. But the other side of the coin is that if it is used carelessly, it can trap you in such a quagmire of debt that it becomes difficult to get out of it. Often people unknowingly make some mistakes, for which they have to pay the price later. Let's know about those 8 big mistakes which you should always avoid.

1. The trap of paying only the 'minimum due'

This is the biggest and most common mistake of credit card. The bank gives you the option of paying a 'minimum amount due' along with the total bill every month, which is often only 5% of the total bill. People think that once they have paid this much, the work is done, but this is where the meter of debt starts.

2. Delay in paying the bill

If you pay the bill after the due date, you get a double blow. First, the bank charges a hefty late payment fee which can range from Rs 500 to Rs 1200. The second and the biggest blow falls on your CIBIL score. Every late payment lowers your score, which makes it difficult for you to get a loan or a new card in the future.

3. Withdrawing cash from credit card

Withdrawing cash from credit card in an emergency seems very easy, but this deal turns out to be very expensive. As soon as you withdraw cash from the ATM, interest starts accruing on that amount from the same day, there is no grace period in it. Also, the bank also charges a cash advance fee of 2.5% to 3.5%. This is a very expensive loan, always avoid it.

4. Using the full credit limit

If your credit limit is Rs 1 lakh and you spend Rs 90,000 or more every month, then it is dangerous for you. This is called 'Credit Utilization Ratio' (CUR). More than 30% CUR is considered negative for your credit score. This shows that you are too dependent on debt. Try not to use more than 30-40% of your limit.

5. Ignoring bills and statements

Many people delete their credit card statements without looking at them. This is a big mistake. You should always check your statement carefully so that any wrong or fraudulent transaction can be caught on time. Also, you get to know your spending habits.

6. Taking multiple cards without thinking

It is not wise to take multiple credit cards by falling for the offer of "lifetime free". The more cards you have, the more difficult it will be to manage them. You may forget the due date of some card, which can increase the chances of your score getting affected. Keep only as many cards as you really need and which you can easily handle.

7. Closing the old credit card

If you have an old credit card which you do not use, then do not hurry to close it. Your credit score also depends on how old your credit history is. Closing the old card shortens your credit history, which can have a bad effect on the score. It is better to keep it active and make small transactions once or twice a year.

8. Spending unnecessarily due to greed for reward points and offers

Cashback, discounts and reward points look very attractive, but getting lured by them and spending on unnecessary things is a trap. You end up spending money on things that you did not even need, just because there was an offer on it. Always spend according to your needs, not according to offers.