Credit Card

general, GK

Nowadays, technology has a positive impact on a banking sector and hence traditional banking has been changed dramatically. Even there are numerous money lending products, such as credit cards, are introduced in addition to traditional loan facilities. Consequently, the process of getting a credit card is rather easy and within a reach of a common man. However, people, who spend more than their earnings, definitely face difficulties while paying their credit card bills.

For one, a credit card is a great tool that empowers people to have an easy access to money and as a result people can spend in more convenient and secured way. For instance, last year I went to Europe with my family and we did a lot of shopping by using my credit card. During that period, my son fractured his leg and I paid the emergency and unplanned hospital bills with the help of credit card. Thus, a credit card can be proved as a great tool not only in day-to-day expenditures, but also during the emergency situations.

On the other hand, credit cards encourage people to spend money they do not have. Therefore, debt can build up and leave people in real financial trauma. When people cannot pay their debts back, they may lose their homes or properties and subsequently this affects their credit rating. These kinds of bad debts also directly affect the banks and in tern it halts the financial development of a country. Hence, the disadvantages of credit cards cannot be overlooked.

In a nutshell, there are a number of pros and cons of a credit card and one has to be very vigilant and meticulous while using it. It is hoped that the balanced and controlled use of a credit card will be beneficial to its customers.

The easiest way to handle a credit card is by paying off all dues at the end of the month. In fact, many of those who do not pay off their balance in full every month simply cannot afford to. An increased cost of living, a set income and the lack of a financial safety net lead a lot of people into deepening debt. Paying off every month gives a revolving line of credit, which is very useful. It works as short-term loans where you take the money upfront and then pay later so you do not pay any interest rate or fees.

While a credit card makes a person life efficient and easy, credit card theft and fraud is a problem that is slowly but certainly spiraling out of control the world over. Card-cloning is the latest in a string of issues faced by the banking industry, by which card details are furtively recorded during transactions at petrol pumps and supermarkets and emailed across the globe for illegal withdrawals from ATMs.

Late payment is another issue that plagues most consumers, because interest is charged on the unpaid balance. Many people make cheque Payments on the due date, and with no mechanism to record the date of payment, card companies sometimes use this as an opportunity to slap on late fees. Some banks have even introduced the concept of charging people for not using their credit cards.

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