Nov 22, 2006 03:34 PM
1482 Views
I never had a credit card for long, it is that when I got a good job I opted for one.
Its mainly for the extra greeds than needs I opted for it.
Remember :
a. You should only buy things that you can afford.
b. Any thing you buy that u cant pay by your own cash , but credit
card is always out of your limit/affordability.
c. You can get 5 credit cards with each 50000 limit and buy
for 250000, but it doesnt means you can afford 250000.
Learning to use credit cards are difficult , its not a one day task.i have seen people using more than 4 cards and utilize the best of it.but when they try to teach me I dont have the patience to learn.
I am not going to talk about the extra features of cards like rewards, insurance etcc.. I just want to share what i personally feel about it.i am listing out the Pros.Cons according to priorities.
PROS:
---------
Gives me money when I want during emergency.
Who in the world gives you money within 15 seconds even without asking: creditcard, I dont have to beg/ask to others. Saves my self respect.
I can buy , if I know I will able to pay, I get enough time till I get my next salary to repay.
You feel happy when you buy without paying atleast for that time.
Thats it, thats all no more pros buddy!.
CONS:
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1.Its an Addiction, you spend more, buy more thats the worst problem of credit cards, more than banks or interest rates.
2.You may end up paying more interests.if you do not pay full outstanding amount.
3.you may not care , its just 50rs or 100rs interests/month, but along
time it will increase rapidly(multiply).
4.Avoid xtra offers. They always have hidden charges.
My Personal Exp:
-----------------------
I spent, i bought, filled up my tank(fuel). Yes was happy, I am happy. But I started to realise that I was spending up my salary before it came to my hand.
if 25 K is my salary, my card bill is already 15k.So there is
no salary left home, remember you have other expenses also.
Bill Day:
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Ok, so I got a bill of 10k. Nothing to worry, so whats the minimum amount to be payed "Rs100" only for 10000 outstanding WOW ! thats great. I will pay 1000 and the remaining next month.
(this is the worst thing to do and I do it.)
So next month I again do purchases of say atleast 6000.Now next bill
i get previous 9000 + 6000 + interest =15500, and minimum due
rs 200.
So you can see from the above example that the bill will only
increase. and even 1paise interest you pay more is loss for you.
Do you know how much interests your savings account gives you
in a year how much: 4%, 6%?(negligible) But using credit card you are
paying minimum 30%/year to bank.
You will find that, no matter how much you pay you are always having some amount remaining.Its human tendency to not to pay. If you are given a choice you want to pay for a thing or get it
free , what would you opt?
So what so ever, be clever, plan and use credit cards. they are not bad. its like wine little is good for health, more and addiction is always harmful.
Tips:
------
Try to pay the availed amount within the first 45 days of purchase.
Or atleast pay 75% of it, never pay minimum amount.
If purchasing more than 15000 in one swipe, try to keep two credit cards and balance transfer. this will give interest free period of 3 months and then repay it.
Check the bill generation date. if its 15th , then you can buy on 16th that
will give you more time(full 45days). if you buy on 14th u r dead.
Dont use card in internet buying etc.. to welcome unneccessary troubles.
Try to live a dept free life.bcos you know that any money from bank you have to pay one day with your own money.
Try to invest on assets, opt for home loans which will give you additional benifits like : tax red..
8.Use cards wisely.
9.If possible dont carry it with you while going out(may seem silly but saves a lot of money).
I am trying to control, learn from my mistakes and improvise myself.
Hope my review will atleast help new card users.
Thanks
Krishna Kumar Banerjee
HCL Technologies, Chennai
