There is always this persistent hue and cry about how credit cards are a dangerous phenomenon and how they can force you to nosedive into torrential debt. It sure is an accepted fact that credit cards can be dangerous and can lead to overburdening debt. However, while such is the case, the credit card user is mostly to blame. The exposure to credit and thirst for wants which are at touching distance has resulted in exploitation of credit and giving rise to unfavourable levels of debt. In this article, we examine a slightly different take on things. We look at how credit cards aren’t really a dangerous phenomenon and look at how they can work to benefit you. Talking of benefits, they can range from raising your standard of living to conveniently satisfying your wants without actually sullying your financial stability.
The fast paced world of technological advancement has given rise to attractive services, products and commodities. Starting from sophisticated and expensive gadgets to the luxury vacations, there is more than what money can buy. It is only natural that we angle various aspects of our life (mostly finances) to acquire what is made available. Talking of this, credit cards are a wonderful idea. Here is what they give you:
Besides the above mentioned obvious offerings, there’s more to credit cards:
Well, considering these aspects of credit cards, one can fairly conclude that credit cards are a serious blessing. However, coming back the point made earlier, they can very well land you in a debt limbo if their usage isn’t controlled.
An important fact that needs to be considered is the annual interest charges. On all purchases you make, an interest is levied. The interests are usually levied on a monthly basis with the interest of all months in a calendar year adding up to about 25-28%. This value can be more because technically, you are charged an interest on purchases right from day one. Interests are levied on unpaid amounts after the first interest free period. The interest free period is usually two or three weeks from the release of the statement. Also, in order to avoid paying interest on your purchases, the entire amount has to be paid in full before the due date.
Credit cards also let you apply for supplementary cards that you can give to your children/parents/spouse. The expenditure on supplementary cards can be tracked at all times and the bills of all cards under a credit account are delivered in a single statement. Banks usually allow you to apply for three or four supplementary cards.
Let us now try and answer the conundrum that baffles a majority of credit card users.
This is perhaps a question that every credit card user has. How does one keep himself/herself out of debt? Well, let us answer that.
Debt is basically an illusion and whether you believe it or not, the whole world is in debt – in some form or the other. Governments, institutions, individuals – everyone is in debt. So the fact that you are in debt isn’t really a big deal, is it? But what level of debt is considered safe? Simply thrusting yourself into debt through mindless spending is going to land you in serious misery. So let us come to the bottom line - how to keep your finances afloat through prudent credit card usage? Here are some points you can consider. Implementing these is the key to maintaining your debt levels.
By following these simple yet difficult-to-implement steps, you can alter the general perception about how credit cards are a bane. Using them effectively wlll bring you three times the quantum of benefits than misery.