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Tuesday, 15 January 2013

Should I get Credit card? Is it worth?

Everybody wants to live luxury life and for that we need various amenities like (Car, AC, Mobile, TV and what not...) to fulfill these desires we tend to get buy these things through credit card, an easy E.M.I. option. Here in this post we will help decide whether should you think of getting a credit card?

What is a Credit Card?

It is a card through one we can pay services bills, buy things and pay to the bank later after 45-50 Days time that too without any interest, this card is not a like other bank card (Debit card), instead in this we get credit limit based on our income, it could range from thousands to lakhs. If we could not repay the monthly bills (E.M.I.) than we will be charged with heavy interest rate and penalty. We can use credit card to withdraw cash from ATM as well, but not recommended.

Credit Card Benefits:

Like many other things, credit card also has both benefits and risks.
- Purchase anything anywhere without carrying cash.
- Keep record on your shopping with the help of bank statement.
- Order/Shop things online or over phone.
- Buy something costlier and pay in easy installments (E.M.I.).
- Payments can kept on hold if you find anything defective.
- Get cash back and discounts on your shoppings.
- Withdraw cash whenever wherever you want.
- You get credit limit of 40-50 Days to repay the money that too in installments.

Credit Card Risks:

- We might end up overusing credit card for things which we really don't need and are costlier and not affordable.
- If you don't pay E.M.I. (monthly bills) on time than you will be charged with high interest and other penalties.
- Improper use of credit card can increase your dept rapidly.
- Interest rate is very high around 35-40% annually.

Is Credit card and Cash Card same? No, Cash card is like it contains cash, which you can use to buy things, pay for services etc.

Important Notes:
- You should use your credit card very wisely, else you might end in more debt.
- Use credit card for required things only and for luxury.

How to take Credit Card Benefits?
- Shop using credit card on start of the month (preferably within 1st week) to get maximum credit limit.
- Avoid shopping on month end as you would get very less credit limit.

Conclusion: Credit card is worth having provided you use it wisely by taking take maximum benefit out of it and by avoiding late fees, interest charges.

Author : Pankaj // 04:20

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