​6 Signs you are addicted to your credit card!

​6 Signs you are addicted to your credit card!
Buying now and paying later is an ordinary practice whether its everyday purchases, dream holidays or consumer durables. There is nothing wrong with it unless it goes out of hand and the person gets addicted to it. Here are a few indicators that will help you find out whether or not you are addicted to credit cards.

1. Exhausting or touching the credit card limit frequently

Credit card can be life savers in case of financial emergencies; they can help you ride out a small financial storm without seeking help from others. So a maxed out credit card is necessarily not a warning sign if it happens once in a while.

However, a month-on-month pattern where your bill touches the maximum spending limit or your card is declined when you swipe it because you have already exhausted your limit (without even realizing it); it is a sure sign of worry. If often you land in such a situation, it’s time to figure out where the money is going, what is the spending pattern, and whether are you buying on impulse? Also, a high credit utilisation ratio negatively impacts the CIBIL score.

2. Constantly applying for new cards

Getting cards is very easy these days. Often you get calls from the credit card companies telling you how convenient it is to get a new card, that there are no charges or that the credit card is being offered free to a select few. So in case one exhausts the card limit of one or more cards, getting a new one to swipe and shop is not at all difficult. Mostly people oversee the fact that while you may chose to forget your debt; your debt will not forget you and all defaults reflect in your CIBIL report for a period of five years. So if one is on a constant lookout for new cards because the old one is exhausted, then it’s definitely a reason to worry about.

3. Depleting savings or no savings

If all what is earned is spent every month, then it is not a good sign for the financial health. Irrespective of how much one earns, the income should ideally be saved every month. If you find that despite budgeting you do not save anything or there is nothing at the end of the month left to save, it’s is a red signal. And if you find yourselves dipping into your savings to pay your monthly card bills, then it is a red signal with capital “R”. It’s like a double jeopardy, you are not only eating away all the earnings and not keeping anything for a rainy day, but whatever you have saved in the past is also getting eroded away. The urge to spend and use the credit card makes planning go awry.

4. Borrowing to pay

Going one step further from using one’s own funds or savings to pay credit card bills is the need to borrow to pay off the debt. In case you are forced to borrow from your friends or family to pay your credit card bills, then surely you have a credit card addiction. Again, resorting to this measure due to some emergency is not a cause of worry; doing it again and again definitely is. Often people may resort to taking personal loans or other desperate measures also to pay the bills without bothering to check their spending.

5. Secretive about bills

If you hide your bills from your family or spouse, then also it’s an indication of an addiction to the credit card. Not wanting to discuss your spending because you also know it’s not a healthy pattern. On the other hand, if your family not being aware of the enormous credit card bills that one runs every month, this is another sign of addiction.

6. Paying only the minimum amount

Another indicator of the addiction is paying only the minimum amount due every month, as there are no funds available to pay the full amount. The bills and charges keep rising but the credit card company does not take any immediate action as the minimum amount is paid, so the debt keeps adding up. This is potential trouble which can blow up at a later stage
Credit Card addiction can cause a lot of financial damage and may tarnish your CIBIL report for a long time. So in case one feels that they exhibit any or more of the above signs or the thought of not having access to your credit card worries you, then it’s time for remedial action.
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(About the author: Rajiv Raj is the Director and Co-Founder of www.creditvidya.com)