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Make your credit card payments error-free

india Updated: Sep 12, 2008 21:30 IST
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People face different situations while dealing with debt. One crucial area in this effort relates to credit card debt because this is easy to run up and then the struggle to pay off the accumulated amount pays off. It is easy to tackle such debt when the plan or strategy is clear or here are adequate funds to manage the debt amount. However, it’s not always so easy.

One way of avoiding roadblocks is to avoid pitfalls where some silly mistake costs the person not only additional interest payments but also prolongs the payment problem. This can be easily avoided.

Credit card statement
A credit card statement is mailed to the cardholder every month. The statement gives details related to the transactions
that the person has made using the card during a particular month.

It also shows the previous outstanding and the payment for the last month. A statement also gives a list of the various transactions that are made during the month, which are then added up to arrive at the total expenses made during the month. Different credits and other additions will then be adjusted in the figure to arrive at the final amount that has to be paid by the customer for the month.

Cardholder requirement
A credit cardholder should look at the amount to be paid carefully and then make the necessary payment. There are various ways in which the payment can be made and one of which is paying by cheque with the tear off portion of the statement and then depositing this at the place where the payment is accepted.

A common mistake
The cardholder has to be very careful while writing the cheque because often there is a situation where they might end up making a silly mistake resulting in a financial hit for them. Many people just take the tear off portion and then fill in a cheque and attach it with the unfilled tear-out portion to complete the payment. This can lead to a wrong payment. The end result is that the cardholder might just pay in the minimum amount due on the card. When this happens the cardholder slips into the interest net where the expense made on the next month will be charged interest resulting in rising costs.

Look at the statement details
One of the first things that have to be done is to look at the credit card statement and all the entries present in it.
This will require going through the entries to determine that there is no transaction the person has not incurred but has still come onto the statement.

Very often a person intuitively knows that something is wrong. The minimum payment is just a small percentage (5 per cent to 10 per cent) of the total payment and when this comes up as the amount due, a second look is required to see why the amount to be paid is so low when higher expenses have actually been made.