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  • Category: Miscellaneous

    Is Bank Credit cards a boon or bane?

    We have both Credit cards and Debit cards issued by banks. While we use Debit cards for our own money, we use Credit cards for Bank's money. With the credit cards, we need not beg for money when we need it. It helps us to meet our urgent requirement. It is like getting paperless easy loan from the banks through ATM.

    But it pains us to repay the loan. We need to be punctual in repaying the dues. Even a single day delay would cost us heavily. Late payments are charged with fine and GST. Ultimately the cardholder incurs financial loss and suffers.

    What is your experience with Credit Cards? Is it a boon or bane to us?
  • #668479
    Credit cards has its own advantages and disadvantages:

    A] Advantages :
    1. Emergency fund
    2. Faster payments
    3. Rewards/discounts for purchase
    4. Cashless transaction
    5. Instalment facility

    B] Disadvantages :
    1. Interest & fees are more
    2. Happen to spend/shop more
    3. Terms and conditions are confusing
    4. Misuse/ loss of card
    5. Hidden charges

    “Each day provides its own gifts.” —Marcus Aurelius

  • #668484
    I don't recommend using credit cards as I don't use it because I have a principle in life not borrow money from anywhere and from anyone. Although credit card has benefits like :

    # It increases purchasing power as people are able to buy the things which are not in their budget at the moment and pay the money afterwards.
    # One gets rewards when they do purchase through the credit cards in the form of points and get discount and coupon.
    # One doesn't need to carry hard cash just carrying credit card is sufficient while going out.
    Also, there are disadvantages of using credit cards like people overspend when they get a loan through credit cards and repent when they have to pay back on interest. One should keep a record of purchasing, otherwise sometimes the credit goes so high that it becomes impossible to pay back at the end of the month.


    " We can complain because rose bushes have thorns, or rejoice because thorn bushes have roses.”
    – Abraham Lincoln

  • #668487
    The credit cards have both advantages and disadvantages. If we use the credit card properly it is helpful. Over spending by using the credit card will result in over due of the payment resulting in charging of interest by the Banks. This is a burden on the card holder. The judicious use of the card helps the people to overcome the financial crisis. In an emergency situation , the credit cards are very handy.

    But, I have also come across people using the credit card lavishly and later failing to pay the bills. This is resulting in financial burden because the interest rate charged by the Banks on the delayed payment of bills is very high and also attracts penalty. We should ensure payment of credit card bills in time

    "If you don’t understand my silence, you will not understand my words"

  • #668503
    It is good or bad using credit card depends on the individual who uses it. One should think the necessity of purchase and use the card judiciously. Then the cars will be useful and you will have some profit by using the card. You will have 30 to 45 pays credit. It will give the user an advantage by way of interest saving. But if we use a card without thinking on wasteful items you will end up paying more bills to the bank.
    If we pay our current bill on the card, we need not pay cash immediately. The bill of the card will come after one month and if we pay at that time to the card straight away we are saving one month interest on the money you have paid. In addition to that, you are getting reward points and cash back and tax back offers. That is an additional advantage to the user. These days there are no fees on many of the cards if we use them for minimum prescribed amounts.
    Credit cards will be good if we use them the way they are to be used. Don't purchase any unnecessary items and never pay the minimum amount and you pay total bills. That will give you a good advantage.

    always confident

  • #668527
    Credit cards are useful when you do not have money in your account and you want to make a payment. They will provide a loan for this amount and give a free period of about a maximum of 45 days to repay it. So people use it in that way but problem is if the repayment is delayed they will charge penalty and interest. Many people are not able to repay in time and pay the late payment charges. That is how a credit card company earns its revenue. If everyone pays in time the company will close down.

    Now a days many credit cards have no annual fee so those who can use them judiciously can go for that. Another thing is that now debit cards are also very popular and there is no need to go for a credit card as one can make all sort of payments with a debit card and only thing is that one should keep some money in the linked savings bank account otherwise bank will charge overdraft charges or decline the transaction.

    Knowledge is power.

  • #668548
    The main problem of these modern services is that until we get addicted to their use, they give it free or almost free. But once they know we are all hooked to it and we do not have any other alternative, they start fleecing us.

    As of now, if we use the credit cards very prudently, not falling into temptation buying, and we strictly repay the due amount fully in every bill before due date, card use is very beneficial.

    But God knows, what will happen once the card usage has become full and permeated into every nook and corner or the providers have achieved their targets. If you watched consistently, you could see that the incentives and concessions have slowly tapered and some even discontinued. That signals what is in store. We may have to pay more for the small convenience we get.

  • #668556
    I consider, credit card to be beneficial/a boon for those who are very sensible and mature in handling the monetary side or else it's a bane. Many youths do indulge in unlimited shopping just after joining a job. Suppose someone quits the job, then paying back the amount becomes a burden. In that case, the whole family suffers, or the youth takes a dire step, which is more pathetic. Thus, I consider it to be a bane, though it has some merits too. People must be sensible enough to understand the benefit of the credit card and use it very judiciously.

  • #668575
    I really appreciate this topic because I am in the trap of credit cards and loans for family purposes. My father has no job security and few years back we decided to construct a house with the help of a loan but unfortunately the decision changed from the estimated plan to beyond that. My father's project completed and he has to wait for the next project(no income in between). Waiting for next project could be for a month or couple of years. I have to manage the family expenses along with loan dues. I thought instead of borrowing money from others, it is better to use credit cards. Suffocated by paying interest and late payment charges. Earlier, I have no idea about interest, I just followed my father's word. Then I decided loans and credit cards are a trap where we are the blind losers. There are some people who maintain credit card usage and enjoys the offers but in my case it didn't work as I utilized for family purpose without knowledge. It's very difficult to conclude whether it is a boon or a bane. Desire just turns into debt.

  • #668580
    If you don't have control on your expenses, or you are attracted to buying unnecessarily stuffs, you better do not use the credit card.

    Anyway you will have to pay the amount you take from Credit card. However, if it is used properly it is a boon indeed. See, the credit card has some limited amount, it may be more than the salary you get. However, use that much you can pay it. Spending money more than your salary can only bring you in problem. Also, look for the bill generate date. If you use your CC after 20th of the month (19th is the bill date most of the cc) then the amount you need to pay after a month or get approx 40 days to pay the dues.

    If you use without thinking and spending maximum, its a Bane if you use it properly its a boon.

  • #668643
    I personally avoid using bank credit cards. I know that when used judiciously, credit cards can fetch you a lot of points and rewards. However most people fall in the debt trap and it is really difficult to get out of debt once you are entrapped. I have seen many people ruining their lives in the debt trap. Thus, the basic policy of my financial planning is to remain debt free as long as possible, and as part of that plan, I do not subscribe to bank credit cards, although many people may find them truly beneficial.

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