A credit card is a financial instrument for making payments etc with other peoples money and then paying for it heavily in the end.I am a card user and wanted a card badly a couple of years ago - prestige issue you see!!! Now I dont want it coz it costs me hell to payback
It is the classic devil providing you with all material needs and taking your soul in return so to say.You go on a spending spree thinking that you can payback later instead you keep paying back and back and back.....The card companies will trip over themselves with offers too good to resist.
My advice to anyone is take the card if -
you need money badly in an emergency like a hospitalisation and you dont have money to settle bills.
You are a frequent traveeller and carring money in pocket is not safe.
You can afford to have a creditcard
You have the capacity to payback atleast 80% else 100% of your montly bill within the payment period.
Thje last point must be thought over very carefully . You card may say an intrest rate of just 1.99% or a maximum of 2.99% is charged but fact is you will be charged this money not on annual basis but MONTHLY!!!
Its like this you spend Rs 100/- anytim during hte month then the bill comes . You will see and entry in the staement like charges or intrrest etc etc. Now say the rate is 2% then you intrest payabale is Rs 2/- and total due is 102 lets say you pay 50 then balance is 5/-(minimum payable amount is 5% of bill).Now next month youhave to pay Rs 97 plus intrest for Rs 97 ie Rs 1.90 approx= Rs 98 lets say so now
in the secoond month you have to pay back Rs 98/- so even though you have paid Rs 5/- last month it looks like you have paid only Rs 4/- now . See where it goes
Thats the way they make money . You can ask any creditcard guy if thid logic is correct ; before that see your latest statement if you have a card and test this logic if you dont beleive me.
Well this is the primary reson why credit cards cost so dearly at the end.This tends to offset the advantage of the easy money they provide