Credit cards are becoming one of the most widely used payment tool in not only developed countries but in developing economics as well. People are well aware of the advantages of using credit cards but here I want to through light on few precautionary measures that credit card holders must take in order to avoid financial loss that over usage of credit card can cause to them.
There is a myth that if you use credit card, you will easily be trapped in credit crunch. There is really no harm in keeping credit card as long as you are well aware of its proper usage.
- Think about your income and spending before using credit card.
- Always pay due amount within stipulated time frame to avoid interest.
- If you stay worried about missing due date of your credit card bill, I would suggest you to choose to pay by auto pay option.
- If you only buy what you can afford and pay off the card in full there is no charge to the card owner unless you have a card with a yearly fee.
- So, If you use credit cards correctly then it is only the merchant who pays.
- Remember, financial planning is crucial to make your life smooth.
But, if you cannot afford even basic necessities of life, you need different support that a credit card can offer to you. This will be country specific – many countries have both government and non- government help – do not let pride get in the way – solve the problem with the correct option and right people.
Many people pay a huge amount of money in interest on their unpaid credit card bills. These people, and the credit card merchants who accept them as customers, are playing the major role in the success of credit card companies.
While many retail stores and other service providers accept credit cards, still many there are many companies that do not accept credit cards and lose much business as they can’t force people without cash to stop by their stores and shop from there.
Some people manage to pay due amount in full every month, hence gain the benefit of the cash back rewards. These cash back bonuses are provided in terms of gift cards which can be used for shopping and dining out in restaurants.
Banks usually charge high interests on credit cards un-paid balances than any other financing facility. This way banks make lots of money on you if you just pay the minimum payments. It is usually better to get a loan to pay off the credit cards debt.