Are Credit Cards good or bad?
Credit cards are around for a while after demonetization, their usage has increased. The post demonetization has replaced cash and dependency on cards has increased. Credit cards have become more of a necessity. With the rampant usage, are credit cards good or bad?
The modern way of using card depends on the person using it. Well, imagine you use a card for the day to day expenses this might not be a bad idea. Suppose you’re swiping card to buy groceries, you will go overboard while shopping for the same.
If you see something awesome on sale you would love to shop you will buy them for sake of discount. This way you’ll end up overspending. However, the solution to this problem is stick to a monthly budget.
Credit cards help in battling the tough months when you don’t have enough cash in your bank account to pay the next step will be a credit card. You can buy and pay later. Plus, they come with an interest-free credit, time phase, and other schemes. This period of time lets you arrange and pay for things that you can’t spend on.
However, if you don’t pay bills on the due date, you will be charged extra fee, high interest, and tax to are applicable. Nonpayment on due will affect your credit card score. This brings bad news because it affects your credibility of buying a loan in future.
Credit cards are advantageous is because of all the ‘rewards’ they offer. There are plenty of benefits and rewards. For every spending, you will receive points. While sometimes the very process of reward point can be damaging too. To earn a point you need to spend some amount.
We’ve heard tons of stories on credit card fraud that happened to people who use information on unsecured sites for online transaction. Yes, an online transaction is easy but has to be done in right way.
With the co-branded credit cards, you can get huge discounts on brands partnered with the banks. You also get cash back during certain festivals. But this also comes with the risk of overspending and buying things that you don’t want.
Say for example credit card runs a cashback offer on selected mobile. The offer may be tempting with the EMI option too. But on the other hand, you already have a phone that functions well it’s not needed.
So can’t buy something you don’t need, you paid for something that can’t be afforded and now repay is outstanding. So you’re caught up in the web of debt and you can’t escape it.
Just like anything exciting credit cards to come with a disclaimer. Credit cards are great until you know how to use them in the best way. It’s easy to fall for all the debt, offers and trap with a credit card but using sensibly is what you need to do.
When credit cards are used in right way they are good to mankind. They are effective quick and convenient. They make the alternative to cash. In case, if they aren’t used well they are a sure form of disaster.
Thus, it all depends on the usage of the card. Take a look at the options you have and then use them sensibly.
Are credit cards good or bad?