Loan Singh Explains – Credit Card Addiction & How to get over it!



What is it that makes Credit Cards so alluring to us? Is it the freedom they give us in buying whatever we want? Is it the convenience it brings to the table? Whatever the reason, Credit Cards play an integral part in every millennials’ lifestyle. Credit Cards also act as an emblem of social status. But, you need to smartly tread the line of Credit Card usage. There are many who fall into the trap of Credit Card addiction. If not reined well, this Credit Card addiction could lead to Credit Card debt, thanks to excessive spending and procrastinating on your Credit Card bill payments. Credit Card addiction can even result in your CIBIL score to drop which can make it hard for you to avail an online personal loan from Loan Singh‘s digital lending platform.

Credit Card addiction, firstly, is quite common. It tests your discipline thanks to the immense financial power that it gives to each card holder. Loving your card too much can turn you into a Credit Card junkie.


Credit Card addiction

Let’s now look at some traits, or signs, of someone who is addicted to Credit Cards.

Living in denial

No Credit Card addict will accept that he is an addict. Accepting that you are an addict will require you to change your lifestyle, make more sacrifices and work towards undoing the carnage of excessive spending. There is a fear within yourself which will prevent you from checking your bill statement, avoid others in the family to check your statement, and prefer living in secrecy to your spending.

Apply for multiple cards

Now, applying for a Virtual Credit Card or Supplementary Credit Card is fine. These cards come with their respective advantages and hence are fine to apply for, if you know how they work. But an addict would probably jump at the opportunity to apply for more and more Credit Cards; even though their wallet is already filled with many. Addiction also includes the wanting to avail of Credit Card offers and rewards.

Lack of savings

Because you are solely dependent on Credit Cards, and pay its bills with almost your whole salary, you have nothing left to save. You are an addict, so you find no need to save cash because your Credit Cards help you spend on petty and lavish expenses.

Oblivious to increase in percentage rate

A Credit Card addict will hardly be troubled with an increase in the Annual Percentage Rate that Credit Card providers levy. A regular Credit Card user would find an increase in the percentage rate to be troubling. A Credit Card addict won’t think much of increased rates, as he/she can manage the card by paying the minimum due balance.

Withdrawing cash using Credit Card

A Credit Card addict will even withdraw cash using a Credit Card. Despite the fees and interest charges that are levied for Credit Card withdrawals.

Max out your credit limit

Most Credit Card addicts reach a point where they recklessly swipe their cards for every possible purchase. This results in maxing out of their Credit Card limit.


Smart usage of Credit Card

Once you have recognized your addiction, it is time for you to start focusing on ways to improve your financial spending. Be responsible with your Credit Card and you can steer clear of addiction. Let’s look at certain Credit Card facets which you should keep in mind.

Credit Card limit

When you receive your new credit card from a bank, or credit card issuing authority, the card comes with a certain credit limit depending on your repayment capacity. Over the course of usage, looking at your discipline in prompt bill payment or owing to an increase in your income, banks may tempt you to enhance your credit limit. A higher credit limit will allow you to spend more, but it is important to continue to be disciplined and also avoid debt. It is better if you do not increase the credit limit for at least the first year of credit card usage; so that you get used to the payment schedule. Increase the credit limit only when your income increases.


Your credit card bill will mention the amount you need to pay towards transactions done during the billing cycle, due-date of bill payment and the minimum amount payable. Stand-out, in a sea of credit card holders, by ensuring zero outstanding balance. This helps build trust between you and the credit card issuer. Also maximize your interest-free grace period. The concept of minimum balance allows you to pay some of the total amount and continue with the credit card usage; but, it also means an added interest charged on the balance that is due. So, make sure you pay the entire bill amount to avoid bearing the interest charge.


Now that you have a new credit card, you might be tempted to get on a shopping spree. Remember that reckless spending could lead to serious damage to your financial planning. Credit card holders end up spending more than they actually can afford simply because of the delayed impact on their bank balance. Make use of a monthly planner, or schedule, to manage your expenses. Keep track of your credit card statements, as well. This will help you to spot any discrepancies on the bill, such as duplication.


Never disclose your Credit Card PIN number and your CVV (Card Verification Value) number to anyone. That’s a sure way to get your card misused and a cleaned-out credit account. Also, ensure that whenever you shop online, it’s always on a secure website.


Banks and digital lending platforms access your credit records to assess your creditworthiness. Be smart in using your credit card and prevent drops in your CIBIL score. Be prompt with your bill payments and avoid overspending past the credit limit.


Credit Card & CIBIL

Being a Credit Card addict is bad in itself, but you also have to deal with a drop in your CIBIL score which can ruin your chances of availing fresh credit. Let’s look at different reasons as to why your Credit Card can affect your CIBIL score and what you should do to avoid a drop in your CIBIL score (apart from being an addict).

Paying the minimum due

If you are in the habit of making regular bill payments, without any delay, then your CIBIL score is sure to improve. But, if you are being regular and paying only the minimum due along with carrying forward some amount to the next month, it is a big NO! This is an indication of struggling finances. So, ensure you make regular but complete payments of your Credit Card bill.

Multiple cards with loans

If you already own more than 3 credit cards and are struggling to clear their respective bills, then it is obvious you are on the verge of falling into credit card debt. These debts will certainly reduce your CIBIL score.

Rejected applications

There can be instances where you applied for a new credit card and got your application rejected. Then you might have applied again at another credit card issuing company, and faced the same fate. These hit your CIBIL score badly, thanks to the hard inquiries each application creates.

Credit Card dispute

You have to pay your credit card bill each month, even if you are in the midst of a dispute. The dispute could be due to a double swipe by a cashier or inaccuracies in previous month’s statement. Irrespective of the dispute, you have to clear your bill on time to avoid penalties and hit on your CIBIL score.

Add-on dues on primary card

In case, if your spouse or family members are using supplementary credit cards, then the payment of dues is linked to your primary credit card. So, better keep a check or halt wayward spending done on the supplementary credit cards; otherwise the monthly credit card bill would be too much of a burden on your shoulders.

Maxing out your limit

If you are provided a decent credit limit, of say Rs. 1 Lakh, remember to never exceed this limit during the course of the billing cycle. It is wise to not exceed 60%of the approved credit limit. This will ensure your CIBIL score does not drop.

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