How to avoid credit card risk

Your credit card spending is a loan; make sure you treat it like that. Credit card companies agree to loan you money interest-free for average 35-40 days. You can sue this to your advantage as long as you pay off the “loan” by the due date each month.If you feel you need to carry plastic fro emergencies, then try a debit card. It will ensure that you are spending only the money you actually have. Most country presently have vast support systems which ensure you can easily borrow emergency cash when you need it.If you do use a credit card, try to make the payments in full. In case you are unable to meet the entire payment, ensure that you set aside the entire money for it from your next pay cheque and curtail the credit card usage until the balance is cleared. Remember that there is a whopping 36% p.a. or more interest to be paid not only on the outstanding balance but also on any fresh purchases you make.Plan your purchases. When you go out for shopping, make a list and stick to that. Don’t be swept away by discounts on products you don’t need. Remember, retail stores are designed so that you spend more. Beware of marketing tactics that make you spend more.

Avoid cash withdrawals and balance transfers from your credit card, since they attract interest from day one.