Credit cards as a spending tool require strict financial discipline when you use them. A mistake while using credit cards can cause you severe financial damage. If you are a senior citizen credit card user, you need to be extra careful because seniors usually have to depend on limited retirement reserves and it would not be wise to pay extra payments towards losses, penalties and interest costs. How to avoid mistakes? Well, you just need to avoid the 3 things that are mentioned here.

Keeping The Credit Card Usage Limit Open Always

Credit card companies allow certain credit limits on the card they provide you based on your eligibility such as income and credit score. You may not need the entire limit available for spending whenever you have to use the card. So, credit card companies allow the facility to control the usage limit on your credit cards using their online platform or mobile application. You can also control limits for domestic as well as foreign transactions. Depending on your spending needs you can increase or decrease the spending limit within the maximum limit offered on your credit card. If you don’t want to use the card, you can choose to turn off the spending facility, for example, you can turn off online usage, POS payment usage, ATM usage, etc. for domestic and international transactions. Keeping the credit card usage active all the time can increase the risk of fraud. So, try to keep the credit card usage limit turned off unless you plan to use it.

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Handing Over The Credit Card To Another Person

In many countries, there are no PIN or OTP required when you make a credit card transaction. If your credit card falls into the wrong hands, they can misuse it to make foreign payments and purchases without your permission. Credit card details such as card number, expiry date and CVV number should be confidential and not revealed to anybody, not even the bank officials. If you hand over your credit cards to another person, they can use their confidential details to steal your money. So, never give your credit card to anyone else.

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Use A Credit Card To Withdraw Cash From The ATM

Credit cards should be used only to the extent you can repay them within interest interest-free period and the applicable due date. Also, you must not use a credit card to withdraw cash from the ATM. On withdrawing cash through your credit card, you have to pay a hefty cash advance fee (around 2.5 per cent to 3.5 per cent per month) on the amount withdrawn. On withdrawing cash using your credit card, you also lose the interest-free credit period until the full outstanding amount is paid back. Sometimes senior people get confused between credit cards and debit cards and they use them interchangeably at ATMs, later they end up paying charges to the card company. So, always keep your credit card and debit card separate to avoid the confusion.

Seniors using credit cards should read their statements carefully and note down all the charges levied on them. They should also access the credit report from time to time to understand the impact of credit card usage on their credit health.

The author is an independent financial journalist.