Introduction
Let’s Start with What is Credit Card? And How to use this Carefully, What are the Benefits and Disadvantages of the Credit Card. What is the difference between Credit Card and Debit card. Is Credit Card is Good or Bad for us. Everyone have these all questions in our mind. People of various degrees are using the Credit Card Extremely. How can they only use this? How many types of Credit Card are available, Which type of Credit Card is suitable for us? And how much Rupees can spend with this Card? Let’s see You will find the answers to all these questions in this post.
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1. What is Credit Card?
Credit Card is a one of the financial tool for borrowing Money from the Bank or Financial Services to make the purchase from Online or Offline. This Card have some terms and conditions for borrowing Money and Spend. This terms and conditions are difference between one to another Bank. You can get the Credit instantly and Buy the Products which you want. At the Day of when you Purchased at the Next 25th day you need to pay the Whole Amount of Money you Spend. If you are Missed your payment date the interest will be Calculated from the next day. Or alternatively you can Pay your Credit with EMI option also. Some Terms and Conditions applicable for this option.
2. How the Credit Card Works?
The Credit Card gives you Credit for your Emergency Purchases and gives some Cashback Offers and Discounts. After use the Card and make the purchase you must repay the amount of Money you Spend for the Purchase. Paid Balance at the correct time no need to pay any interest and other Charges. If you paid only a portion of Balance, the interest is Calculated. It is based on Card’s Annual Percentage Rate (APR).
3. Various types of Credit Card
Nowadays, so many Companies and Banks are Offering many types of Credit Card for the Users. Business Persons, Self Employed, Salaried Persons, Students every Peoples financial Status Varied one from another one. Everyone uses it for Different needs. Somebody wants more Cashback and rewards for their purchases.
1. Standard Credit Card – It is a basic Card for Daily usages, like Groceries, Medicines, Purchasing Essential products and more. For this Card you can’t get any reward.
2. Reward Credit Card – This type of Cards are offering Ultimate Cashback Offers and Rewards points to the Users. And also Providing Travel Points and Shopping offers and Rewards. It is suitable for people who spend more money Money for the Purchases and Shopping.
3. Charge Card – This type of Cards are useful for people who needs High Amount of Money at the Emergency time. You can Borrow Money from this Card and repay the Whole Amount at each of the Month. This Card have no Limits for Borrow Money.
4. Student Credit Card – Sometimes Students also need financial help from outside. So these type of Cards allowed students get, Money for their Education needs and Higher Studies.
5. Business Credit Card – This type Cards are Need some Huge Eligibility to get this Card. It’s suitable for Specifically Business person who spends more expenses and earn business oriented rewards.
Pros of the Credit Card
1. Rewards and Cashback Offers
Specifically, this is the major reason for peoples why wants Credit Card. In this generation people wants some extra Rewards and Cashback. And also offers Travel Points. These rewards are redeemed as which type you want. Including Special Bonus for Specific Categories like Groceries, Online Shopping, and Fuel refill so many Options are available. Credit Cards are reducing the Price of the Products from the Fixed Price. These rewards and Points are encouraging the usage of Credit Cards.
2. Convenience and Flexibility
Credit Cards are allows users to make the purchase without need of Money. So many Types of Business and Shopping Malls, Online Stores are accepting the Credit Card. Specifically it is one of the best Money Solution for the Travellers. Because they are Traveling around the World, at the Emergency situations they use the Card and Solve the Money Problems. And so many Online Stores are providing Exciting offers for the Specific Credit Cards.
3. Low Interest
Credit Card are allows users to Buy the Products without any Initial Payment and reducing extra Charges. If the Net Amount was paid before the Due Date, Interest and no Extra Charges are Charged for the Purchases. And it’s allows users to Withdraw Money Interest Free for a Short period. So the Users are showing interest in Credit Card.
Cons of the Credit Card
1. Hidden Charges
It is Beneficial for us to spend the Money in our Bank Account. But we need to think carefully before spending money we don’t have. Before borrowing Money from Card carefully read the Terms and Conditions what is in our Favor? and what is in our Opposition? Because without reading this condition if you Borrow Money from Cards, At the payment date you need to pay unexpected Payment to the issuer. Annual fees is Collected from our Side. Some Card issuers not charging this. Unlike you missed the Due Date you need to pay Penalty charges and Extra Interest. Foreign transaction and other Card transaction charging Specific Amount for this type of Activities.
2. Debt Risk and High Interest Charges
One of Biggest Disadvantage from Credit Card is these two Factors. Before the Payment Date, if the full amount is Paid by the users additional charges and interest not necessary. But the one of portion is paid by the users remaining balance are accrues interest. And the penalty charges also need to pay by our side. You credit Score also moves to fall down. Then the Long time pending Credits are increasing the rate of interest. This will put us in a huge Debt burden. So before Using the Card Read the what is the rate of interest? Penalty Charges and Delay Payment Charges. Then use it Properly.
3. Encouraging Overuse
Money earning through hard work. Spending our own money is different, Spending Money we don’t have on our Luxuries is always Dangerous. Specifically this word is Hundred percentage suitable for the Credit Card. We become debtors by fulfilling our Luxuries and then not being able to repay the money we bought because we get money easily. It’s encouraging our Greedy. Spend the Money for our Essential Requirements. If you spending Money for Luxuries Life, it’s Paves the way to Danger.
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Conclusion
There is Good and Bad in everything. Everything is good in moderation. If you Violate the rules and regulations, will pave the way for the hellish life full of Debt. This Cards are very useful at the Emergency situations. But don’t use that for a Luxurious Lifestyle. Use it Properly and live the Happy Life.
