How often have you seen someone going through their wallet searching for a credit card and they themselves are shocked by the number of cards they have in their wallet. Credit cards can be used as a form of identification when applying for a major purchase, or can be used for convenient purchases that you won’t have to pay for until a month after you buy them.
Typically, people who have an habit of using credit cards, they use them frequently carry a balance from one month to the next because they are unable to pay off in full when the bills come in. Now this is the time when an individual is seriously punished by the banks which offer them credit card with high credit limit, and most of the people get addicted to it and what happens next ? Credit card holders are being charged high interest rates for each of their purchases.
Credit cards makes a person to buy a product which he couldnt have afford to if he has to pay by cash. It is buy now and pay later scheme. It is very easy to pull out a piece of plastic, swipe it through the machine. A person thinks that he would pay off the bils once he gets money and most of the time he/she would end up by making only a partial payment towards the outstanding balance and become a victim.
Finally the trick using the card is how you use it and how you make the best use of these credit cards. It is helpful to keep only one or two credit cards available to you at one time. Even if you receive a new credit card offer you should stick to having a general use credit card and one for emergencies. An emergency credit card allows you the peace of mind of knowing if an unexpected expense comes up that you have to pay, but don’t have the extra money available to pay it, you at least have a backup in the form of a credit card that will allow you to pay for it.
Using a general use credit card should be done with extreme discipline. Select one that offers rewards such as cash back or other features like balance transfer with a low interest rate or we have some banks which do the balance trasnfer at 0% interest rate.
Always swipe your card keeping your billing cycle in mind and keep track of your purchases so that you know how much money you are using on the card. That way, you will know that you are not crossing to the extent of purchase where you would be unable to make full payment and can control at that moment
Remember friends credit cards are always source which makes addictive as a normal person earning 5000 to 6000 Rs a month would get a credit limit of 12000 to 15000 and along with he would also get a cash limit where he can withdraw cash from ATM’s, and I advise all you people to stay away from this feature in your credit card because the bank imposes you high interest from the day you have withdrawn the cash from the ATM and there is no grace period.
Last but not the least I recommend people to have one or two credit cards and ensure that the bills are always paid in full befoe the due date and if you still feel you cant you can go ahead and use the balance transfer feature and to have that you need to have a credit card of such a bank which would offer you free balance transfer or minimum interest rate on balance transfer and have that card only for the purpose of balance transfer and strictly no purchases.
Stay away from getting addicted to credit card, always keep it in secured place and if possible keep the cards in your walltet only when there is need of purchase.