Shopping online is fun and convenient, but only if you don’t max out your credit card limit and leave yourself with bills that you cannot repay at the end of the month. If you’re an online shopaholic with little financial discipline, below are some handy tips to avoid troubles:
Don’t hold more than two cards
Avoid using too many different cards because you might have a hard time keeping track of all your online purchases. Select one or two cards that you understand well and give you the best interest rate and terms.
Furthermore, a regulation set by Bank Negara Malaysia (BNM) in 2011 stated that all cardholders can only hold credit cards from a maximum of two issuers.
Choose the lowest interest rate
While this may sound like common sense, you’ll be surprised how many people don’t do this! If you have more than one card, you should always shop with the one that has the lowest interest rate. That way, if you fail to repay your bills on time, you would at least save yourself some interest charges.
Take advantage of interest-free period
Most banks don’t charge you interest for up to a period of 20 to 45 days after you make a purchase with your card. This period is known as the interest-free period.
If you do not pay the full amount by the end of this interest-free period, any outstanding balance will be brought forward to the next month and interest would be charged on the amount you owe. To enjoy an interest-free shopping experience, make sure you repay within the interest-free period and spend within your own limits.
These practical tips if practised will help you avoid falling into deep debt. They are not only applicable for online shopping, but also on all credit card spending.