Is Credit Card Good or Bad?
It Depends.
If you do not have self-control and discipline, please do your self a favor! Do not ever subscribe to a credit "doom" card. You are better off on a cash-to-cash basis and stop reading this article because this is not for you.
However, if you are a cheap stake or "kuripot" and knows how to handle finances very well, you are missing a lot of benefits and privileges if you do not have a credit card yet.
Cons of Credit Card
- Debt trap - If you mishandle your finances using your credit card, the credit card company will hunt you in your workplace or in your house or even in your dreams while you are sleeping.
- Revolver - Do not be a revolver! Be a transactor. On your due date, the credit card company will offer you a "minimum amount due", do not fall for it because the interest rates will work against you, sooner or later you will be on the "debt trap" - If you think you do not have the capacity to pay in full on your due date, DO NOT SWIPE your credit card!
Pros of Credit Card
- A credit card works like an investment - Whether we like it or not, we need to spend on food, home improvements, clothing, and utility bills and there should be no reason why you should not charge those in your credit card. If you pay these bills in cash - you just lost cold cash. If you pay those expenses using your credit card, you will earn points - the points you earn will add up and you can use them to pay your future bills. Isn't it wise to invest in your unavoidable expenses?
- Credit cards should be free - Tons of credit cards today offer a free lifetime annual fee. If your credit card provider charges you with an annual fee or does not want to waive the annual fee, you better close that account and switch to another credit card company that offers it for free.
- Build your credit history - There are 2 kinds of loans, first is the bad loan and the second is the good loan. The good loan - you borrowed money in the bank (8-12% interest year) and used it on business or investment and made 20% or more in a year - as a result, you made money from your loan. The bad loan is, you borrowed money from the bank, used it for leisure purposes - as a result, future headache plus the loan interest.
Do you need a good loan but having a hard time to get approved in the bank? This is where your credit history comes in handy. Trust me on this, if you always use your credit card and you always pay on time, you will get flooded by phone calls from your bank and offer you a loan without any requirements or bank appearance. Our lovely banks will compete with each other to death just to get a customer with good credit standing. And once you get that loan, make sure to use it wisely as the good debt.
Having a hard time to apply for a credit card or do you need a credit card referral? Apply here
TIPS:
In times of emergency such as heavy medical expenses, etc - refrain from using your credit card if you do not have the capacity to pay it in full on your due date. If you use your credit card as the answer - it will be a disaster. Come on! Do not use your credit card as your health card if you can't pay it straight up. Instead, as early as now, why won't you start investing in health insurance?
P.S.
Social Emergencies as birthdays, weddings, occasions, travels or even 50% sale on shopping malls are just a social emergency - avoid it if you can't afford it. Remember this quote from one of the world's greatest investor before swiping your credit card.
“If you have to ask how much it costs, you can’t afford it.”