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American Express and MasterCard credit cards are shown in Washington. Jim Bourg/Reuters
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How to best manage your credit card

Abitha Deepak,

February 19, 2009

A credit card is a useful tool, when managed judiciously but a lurking danger if you mismanage it.

Currently, threatened by the global financial crisis banks are changing credit limits, doing away with interest free periods and charging higher interest rates on the credit borrowed.

One of the first things you need to keep in mind is to read the term and conditions, when you apply for a credit card. It could be a laborious process but something that has to be dealt with, to protect yourself from any rude surprises that might be in store for you in times like this.

One hears stories of money being taken from the savings account of a person who has a credit card with that particular bank! Well, banks are allowed to do so, when a default occurs, the clause is covered in the terms and conditions.

Banks also have an auto debit facility to claim a minimum payment on credit borrowed, if in case your account does not have enough funds, banks are allowed to levy a fine, which varies from bank to bank.

So ensure you always have sufficient funds, when you opt for the auto debit facility to cover your minimum payment due. But there's more to credit cards. Read on. . .

Image: American Express and MasterCard credit cards are shown in Washington. Jim Bourg/Reuters

Also read: Obama promises to restore the American Dream

The author is Head of Content & Research at

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