Thank God, its the last week of the month! With salary just a few days away, its time to party! Alas, not enough funds!!! Does this situation sound familiar? If yes, then you probably have fallen prey to the necessary (or unnecessary) evil called the credit card.
Well, credit card is the first hurdle to effective wealth management especially for salaried people. The credit card business is really flourishing these days. How many times have you received calls from credit card companies, offering lifetime free credit cards? The calls won't stop coming until you accept one of their offers! Its really hard to reject their offers. 'I am calling from xxxx, and we are offering you a lifetime free credit card. You will get 20% cash back on booking air tickets. You also get one rupee back on every hundred rupees spent on your credit card. In addition, you also get blah, blah, blah...'. You don't want a credit card, so you say, 'Thank you, but I am not interested right now'. 'Why sir? You are getting it free for lifetime. You get this, and this, and this, and that on the card...'. Well, you just cannot refuse, especially if the person at the other end has a sweet female voice ;) Chances are that you will go for one of the cards eventually...
Initially, we are a bit tentative to use the dreaded card. But alas, once we use it, we get into the habit. Now, we end up using the credit card for each and every transaction, however small or big it may be, mostly because of the seemingly attractive offers you get. The result? A long monthly bill statement, consuming more than half of your monthly salary...When you analyze your bill statement, you agree with all the billing details. But you just keep wondering, how it adds to so much. I myself have once paid a bill of 32k(without interest), but have stopped using it. Now, I just use it for booking travel tickets... If you have absolutely no control over your credit card, then chances are that you can't pay your bill on time, and you end up paying a hefty interest the next time...
Some people will use 2-3 credit cards and then use one to pay the bill of another. While they continue to repeat this cycle, they end up paying a transaction charge every time. Little do we realize that we become used to staying in debt.
I won't say you should not use a credit card. Use it only when needed, for example when booking travel tickets. For making general purchase, get into the habit of using a debit card. Atleast, you will stop spending wastefully when your account balance reaches a certain threshold. Still better use hard cash! Atleast you would know how much you have in your wallet and how much you can spend at that moment. This seems like an obvious and useless advice at first. But it certainly ain't as useless as it might seem to be! I hope this post will make you think twice before swiping!!!
2 comments:
Finally you realised tht it is gud to us your debit card instead of your credit card.. you see you should sometimes listen to ppl.. specially wen they r more experienced than u..
young ppl specially s/w enggrs spend extra now a days.. jus coz they hav extra credit at hand.. u see.... they endup paying more than half of their salary... i hav stopped using my credit card since long long ago..wen i realised i used to become indebted to the bank... m happy using my debit card.. i too use my credit card only for ticket bookings..
But some of the times, their offer are really lucrative and worth considering, but the problem lies with people who do not pay their due amount before the due date. This can be my personal belief that it depends upon the individual, a person should go for it after cosidering all the side effects, but for some, it can be really beneficial, although I also do not have a Credit card with me. But altogather a nice read. :)
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