Regarding the Minimum Amount Due Trap and it's Consequnces
I have a debt of 3 lakh plus with my credit card and two loans to cover it, I was using credit cards ruthlessly and was only paying minimum dues which backstabbed me in the last 6 months, I was careless in money management and I am living low now, used my epf amount to consolidate two credit cards and my friends played a crucial role in helping me out. I don't know if I would succeed becoming debt free in 1 year, but will try. So never ever pay minimum dues and fall into this trap of banks and lenders.
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This type of financial knowledge should be taught in every schools and colleges , instead of formulas and all
You're basically asking to be spoonfed about life whereas teachers in schools were/are unaware of this probably. If everything is spoonfed, you never feel the urge to learn something. You should explore whatever that you feel this should be known to live a life and not everything is needed to be taught in school. School is to learn basics, not entirety of life.
Personal Experience Dealing with Credit Card Debt:
In my personal experience, one possible approach when overwhelmed with credit card debt is to pause payments for a few months and then negotiate a settlement. I followed this strategy with 8 different credit cards, and it worked in most cases. Only one HDFC card remains, and I haven’t paid anything on it for the last 3 years.
The worst-case consequences I faced were: • Drop in my CIBIL score • Frequent calls from recovery agents • Occasional home visits • Informing my contacts that I hadn’t cleared my dues
But eventually, the pressure eased. People tend to forget over time, and things settle down.
That's just the most terrible advice ever. How did you just casually move past recovery agents at your doorstep?
A guy using credit cards to live beyond his means is obviously not oblivious to what people around them think OF them, so believing the fact that your contacts getting informed of your financial irresponsibilities will have no bearing on the psyche of such a person is just the most moronic idea I've read today
How is paying min due is costed you?
Can you explain in detail
Paying minimum due just saved extra penalty charges to be levied, you will still be charged interest on balance due at whopping rates upto 3-4% per month till you pay the full due amount... So paying minimum due doesn't have any real value. Delayed payment will anyways shit-up your Credit Score.
Minimum due trap is a single biggest reason banks push credit cards. They are willing to wait for 1-10 years, in hope user will one time in their life fall in a situation they can't pay complete bill and opts for minimum amount.
HDFC uses dark pattern around it. They have set default option chosen as "minimum amount", instead of "full amount" in their mobile and web app, to push user towards using min, instead of paying full amount.
Agree, I observed the same, by default minimum amout is chosen, speaks volumes they go to exploit innocent people who think they are clever enough to not pay in full
Did the same with my credit cards. Availed 8 lakhs of credit and ended up paying 24lakhs. Had to sell off my esops. The same esops are worth 5+ crores.
Never ever spend more than your earnings. Don't fall into credit cards
I helped my friend who had 8.8 lakhs of debts in multiple credit cards. He was also paying minimum due and trapped in it. I took personal loan and now he is paying me emi. Guys don't fall into credit cards trap.
Rule 1 Of credit card- always pay in full Rule 2 - never forget rule 1
I don't think credit card is scam or a trap. You should know how to use it properly within a limit. Credit card usually have better consumer protection tgan debit. We get a lot of points and rewards after every transaction. We can borrow money temporarily. Travel benefits. And many more. It's totally on us . How are we using it.
If my salary is 25k per month. But my credit limit is 50k.
And I'm spending more than my income tgen obviously I will be having debt. Plus my credit score will get affected and I would be facing some issues in future for loan as well.
So soend wisely.
Make a rule on your spendings, transaction, expenses.
Credit card isn't a trap, Paying minimum due is a trap
