Do you use a credit card? And yes how many credit cards do you use, one two or more, but do you know there are some advantages and disadvantages of using more than one credit card.
Credit cards are used by all of us in case of financial crisis. It not only provides financial assistance to the user, but also helps in improving the credit score if the amount availed by him is paid on time. But did you know that credit cards work not only to provide financial assistance, but also provide many other benefits.
Advantages of credit cards
- There is no need to carry cash in case of credit card. Can be carried safely while traveling or shopping.
- Useful for improving credit score (Cbil).
- In one way, a loan is obtained for a certain number of days without interest. (which has to be paid as per payment cycle)
- Reward points are earned on every spend or usage. And with those reward points you get gift vouchers or products or other benefits.
- It also has a chargeback facility if you are not satisfied with any of the services or products.
- Credit cards also help in foreign currencies during international travel (if the facility is activated). You don't need to carry much cash in that country.
- Their offers keep coming from time to time. Extra discounts or cashback on flights, hotels or restaurants. Its benefits can be considered additional.
- Airport Lounge Access. Domestic and international airports have large lounges. In it (credit card category is determined) food, bath etc. facilities are almost free. Almost free means 2 rupees to 20 rupees charge. (which is refundable)
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Disadvantages of credit cards
- Very high interest rates. If the balance is carried forward during the payment cycle, 22% - 30% interest has to be paid.
- Irregular payments or defaults in payments worsen the credit score (CBIL).
- Annual Charge: There are different types of cards. As the services increase, the charges increase. The facilities which are free cards are also limited. Fees ranging from 2000 to 5000 or more are applicable on the card every year.
- Credit card fraud cases are very common. So if we share card details, pin number or one time passcode with anyone, this problem can arise. Some people even make a clone (a duplicate copy) of the card. In which there is a long process to get our card amount back.
- Cash advances or cash withdrawals incur hefty charges. The cards vary from company to company. And apart from the charge on cash withdrawals, the daily interest also seems hefty.
- Surcharges and other levies are also constantly levied on the card.
- If you cross the credit card limit or miss a payment, there is an additional fee.
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What to keep in mind
- Use credit cards only as needed in times of crisis. Thus, there are no problems with regular use. But the amount does not go out of the pocket immediately, so people are a little careless. And then the crisis time is mentioned because the problems occur when the debt increases.
- Keep in mind the credit days at the time of monthly payment. They have greedy offers. Pay the minimum or pay in full - In these circumstances it is always imperative to pay in full. Due to which we do not get trapped in the cycle of high interest.
- Keep the payment cycle in mind. 30 days or how many days? It often happens that if you shop a day or two after the cycle starts, you will get full days of credit. And if you make the payment before the due date, you will get less credit days.
- Keep track of your expenses. Keeping credit card android application in mobile. So that you can keep track of your outstanding balance and its details as well as reward points. And can make timely payments or redeem reward points. And can report if any fraud transaction takes place.
- It is very important to subscribe to email and SMS transaction alerts. (Someone in Mexico attemped a transaction from my card. And at midnight I got an alert message. Talked to the call center in the morning and got it blocked. And I was issued a new card)
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