- May 21, 2023
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“Take Very good care of your finances. Your Finances are your responsibilities. We can only suggest and guide in your way. Be serious about your finances. Foreign economies are ‘spending’ economies; but Indian economy is ‘saving’ economy”
Welcome to yet another exciting episode of the Financial Blogging series ‘Finance and Personal Finance’. Today in this blog ‘Nine reason why you should avoid Credit Card’ we are going to learn about credit cards and the benefits and disadvantages of having a credit card/s in our hand. Now-a-days, as soon as we receive our first pay cheque, banks and financial institutions start calling us to have their so-called special credit cards with fancy names such as reward cards, fuel cards, travel card, fine dine, Flipkart card, Amazon Card, MMT (Make My Trip) card, reward multiplier, HNI card, IRCTC card and a lot many more types of cards. They attract us with their lucrative benefits for example if we use X card for shopping online, 5% additional discount or cash back above all coupon and discount codes etc. These offers are really tempting and we choose to have ‘that particular’ credit card.
While these offers are really helpful to reduce our financial burden from us to a little extent (possibly by 5 to 10%), there are some points we need to understand very well before opting for the credit card. Keep on reading this exciting information to gain really insightful knowledge.
PolyBlogger.com always say one word when it comes to managing finances and financial assets, ‘CONTROL’. This blog ‘Nine reason why you should avoid Credit Card’ tells you how you can control your finance. When we control finances and financial assets, we are not just saving the money, but we are generating more money and saving even more further. By controlling our expenditure, we will probably not end up borrowing the money either, which can lead to a happier life. Now you know that ‘CONTROL’ is the word for handling the finances, but how? PolyBlogger.com recommends you read each series of blogs to better understand what ‘CONTROL’ is and how to ‘CONTROL’ Finances.
- Nine reason to know why we should avoid using Credit Card
PolyBlogger.com recommends not to use the credit cards if credit cards are leading to below mentioned problems –
- You do not actually need the articles that you desire to buy AND you do not have hard cash to buy it. It is just a luxury to enhance the standard of living. It will only expand the expenses in future. e.g. when we buy air conditioning using credit card. It is luxury and is going to increase the electricity bill, maintenance expenses etc., in future. I am not saying you do not buy air conditioning. I am saying do not buy it on credit cards if you don’t have sufficient capacity to pay, if cannot afford the increased expenditure, if you cannot maintain it. They say that person can buy Mercedes car but it can be difficult to maintain it, feed it. So, all in all don’t buy luxury if you are not sufficiently ready to buy expenses later.
- If the annual fee is higher than most of the credit cards available in the market then try to dump your credit card and have a new one. PolyBlogger.com recommends you all to opt for zero annual fee credit card.
- See if the credit card is saving handsome amount for you. For example, cash back offers of 5% or 10% all over the year on all purchases, fuel surcharge waiver (most commonly found benefit), low annual minimum spending amount to save on annual fees, widely accepted card in almost all stores, dining benefits, movie benefits, festive season saving schemes etc.
- If there is already heavy outstanding on credit card, try not to use the card before you settle all the earlier dues. Otherwise, you might will end up borrowing the money. You might also default in payment, partially or fully. So, keep control over your expense.
- If you have one credit card or probably two, do not apply for third unless it is absolutely necessary. By ‘Absolutely Necessary’ I mean if you want to pay at such a vendor who is accepting only one type of credit card or not accepting particular credit card and cash. Meaning If any vendor is not accepting American Express and you only have that card, it will be difficult to transact with that card. PolyBlogger.com recommends you to have that credit card which is widely accepted in India as well as in foreign countries. AMEX is not widely accepted in India only few million vendors accept the AMEX cards and that too some charge 1% to 4% to compensate the AMEX vendor fees/commission. On the other AMEX is widely accepted in most of the countries and they provide other benefits like if you lose your credit card outside of the country you are residing, they will generate another card and reach you within 72 hours, where ever you are in the world. You also get travel insurance, travel medical insurance, travel accidental insurance etc. depending upon the card and benefits you have opted for. PolyBlogger.com recommends that card despite having higher annual fees and little presence in India because of its world class services. PolyBlogger.com also recommends SBI Credit cards because it is widely accepted in the India as well as in foreign countries. I have made my payments in USA using SBI credit card. It also offers attractive discount offers online like on Amazon.in, Flipcart.com, Myntra.com etc. the discount offers continues in the shops and malls as well.
- f you have higher debt burden, do not use credit card. Delay in buying the articles, services etc. or buy it on cash.
- When you are not getting any benefit of using the credit card, do not buy using credit card. If you are not getting benefit, why will you give benefit to Credit card service providers. Very simple, isn’t it?
- When you get offers such as buy worth Rs 500/- more to avail particular offer or buy worth Rs 5000/- and more to get 5%-10% off etc., unless it is likely to be the bill amount; do not use credit card. Simply because to avail credit card offer you might end up spending more which you actually don’t need. In this case let the credit card offer be in dust bin. Like in point number vii above, if you are not getting real benefit, why we should use the services? It can just increase the credit card reward points which are not beneficial in short to medium tenure. Rewards are beneficial when you accumulate sufficient reward points which is possible only in the long run. Think again.
- PolyBlogger.com do not recommend to have multiple credit cards unless it is necessary. Multiple credit cards can only spend more money from your pockets. Each card will have annual fee. More card can lead to more (sometimes unnecessary) buying. All this can only lead to increased expenditure where as one or two cards (maximum two recommended) with all the necessary benefit can relive your life. So multiple credit cards are not recommended.
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