Many people want to use Credit Cards and want to know what are Credit Cards, how to use Credit Cards and why Credit Cards are bad and good? In this article, I am going to explain the answers to all these questions and tell you whether you should take Credit Cards or not?
There are many myths in the market regarding Credit Cards, due to which many questions arise in the mind of a beginner regarding Credit Cards.
Therefore, if you also want to get or apply for a credit card, then before that it is very important for you to know the information given in this article because in this article a beginner level information has been shared about Credit Cards.
What is a Credit Card?
In view, Credit Card is a plastic card like Debit Card, but there are many differences between Credit Card and Debit Card. A Credit Card is like a loan given by the bank to us, which we can use first and pay it later.
With a credit card, you can make online payments for shopping or buying something, now it is not necessary that you have sufficient balance in your bank account.
But this does not mean at all that the bank gives you free money through Credit Cards because you have to pay back the money spent to the bank within a fixed time and if you do not make your payment on time, then you have to pay this amount with interest later.
Credit card is not linked to our bank account like Debit card, so when the bank issues our credit card, it sets a limit which can be anything from Rs. 25,000 and we can spend this amount within one month. This limit keeps on increasing along with the use of your credit card.
Who can Apply for the Credit Card?
Not everyone can apply for a Credit Card, for this, you have to fulfill some demands. Like – If you have a good income source i.e. you have a job with good salary or you have a business and if your CIBIL Score is good, then you can get Credit Card easily.
Overall it means to say that if there is a transaction above 15000 every month in your bank account, then you can easily apply for a credit card.
But even if your salary is less than this, you can apply for a credit card and even if you are a student who does not have any salary, how you can apply for a credit card, I will also tell you further –
You can apply for the credit card both online and offline. You can apply for a credit card online by visiting the official website of the bank for which you want to get a credit card and if you want, you can go directly to your bank and apply for a credit card by filling an offline form.
As soon as you apply for a credit card, a credit card is sent to your given address after one month, after which you can use it.
How to use Credit Card?
When the bank issues your credit card, the bank already gives you a limit set by fixing it, which keeps on increasing over time. You can use the same amount for shopping, making payments or withdrawing cash from ATM machines as per the limit given by the bank.
If you want, you can also withdraw cash from the credit card, but as soon as your cash is withdrawn, Penalty starts being imposed on you. That’s why I would never prefer you to withdraw cash from Credit Card because it is costlier than your shopping or purchasing and for this you have to pay more interest.
You can use a credit card at any place where you can use a debit card. But before using it, you have to keep many things in mind, which we will now discuss further.
Let us now know about the Advantage and Dis Advantage of the Credit Card, which you will be able to know why Credit Cards are bad or good-
Why Credit Cards are Bad or Good?
If you use Credit Card like a responsible person, then you can get many benefits from Credit Card and with its help you can also Make money, but for this you need to have proper information about Credit Card.
In the beginning, the bank shows you tempting offers to give you a credit card, so that you get attracted towards them and take a credit card, and then if you do not have a proper guidance of a credit card, So you will spend so much money from this that you will be in a lot of bank debt and your CIBIL Score is greatly affected by this.
Why Credit Cards are Good?
- Friends, although there are many benefits of credit cards, in which the biggest advantage is that if we need money in an emergency somewhere and we are ashamed to take money from our friends or If your friend does not give you money, then in that situation you can pay that amount with a credit card.
After one month of using the money from the credit card, you can pay that amount.
- The second advantage of credit card is that when you do shopping or buy something with credit card, you get some Rewards Points in it, which you can redeem later.
- The third advantage of this is that when you make payment through it, you get a lot of discount in it. In Credit Cards, you keep getting many offers from time to time, due to which you get Maximum Discount while shopping.
- Another advantage of Credit Card is that you do not have to carry cash with you anywhere because you have Credit Card in the form of plastic money in your pocket, from which you can make payments anywhere and this also reduces the risk of your money being stolen.
Why Credit Cards Are Bad?
The way Credit Cards have many advantages, in the same way there are many disadvantages of Credit Cards. If you do not use the Credit Card smartly, then you can also drown in debt.
Many people call Credit Card bad because they do not know how to use it properly, as a result of which they get to see its negative results.
Now it is certain that if something has advantages, then it also has many disadvantages. That’s why it is important for you to know about the disadvantages of Credit Card as well, otherwise Credit Card can prove to be harmful for you.
- The biggest disadvantage of Credit Card is that if you fail to pay its bill, that is, if you do not pay your bill for the prescribed period, then you are charged with a substantial penalty, As a result, you have to pay more amount than your bill.
- The second big disadvantage of credit card is that if you withdraw cash from ATM Machine with credit card, then penalty starts being levied on you from the day of withdrawal of cash and until you pay this amount, till then this penalty remains active on you.
- The big disadvantage of the third credit card is that if your credit card gets lost and a person does International Transaction with it, then you do not even get OTP in that.
During International Transaction, that person only needs your credit card number and the CVV number written on the back side, which is clearly written on your credit card.
But if that person does a National Transaction in India with this credit card of yours, then OTP comes to you in it because due to the rule of RBI (Reserve Bank of India) in India, no National Transaction can be completed without OTP.
Therefore, a security layer increases for you in National Payment, which has been implemented by RBI.
But if someone makes an international payment with your credit card, then there is no control of RBI in it, you do not get any OTP in it.
So if your credit card is lost then anyone can misuse it. That’s why you should get your credit card closed as soon as you lose it.
- Another major disadvantage of credit card is that it leads to unnecessary expenses, that is, even if you do not want to buy anything and at that time you have a credit card, then you will feel like let’s buy it.
It is because no one takes the tension of the bill, they think that the bill has to be paid only after one month. That’s why if you want to get a credit card, then it is very important to have patience on yourself, otherwise the credit card will make you a lot of debt. By having a credit card, whatever you do not want to buy, you also buy it, but you have to avoid doing so.
How to Generate Credit Card Bill?
When we do shopping anywhere with credit card or buy anything, then after a few days your bill is generated and even after the bill is generated, we get about 15 to 20 days’ time to pay that bill, which is sometimes even of 1 month.
When we spend any money from our credit card, after about 50 days we have to pay that amount. In a way, we can say that an interest free loan of 50 days is given to you by the bank.
This bill is also shown in your bank’s Net Banking and it is also shown on the official app of your bank. Here all the details of your bill are mentioned that where, how much money you have shopped.
If any kind of penalty is imposed on you, then it is also shown there. Along with this, a Due Date is also mentioned there, till which date you have to pay your bill.
On payment, you are given two options, in which either you can pay the Minimum Amount, or you can make full payment of your bill.
But here I would advise you that you should always make full payment because if you pay the minimum amount of your bill, then a substantial penalty is levied on the amount that remains.
You should pay the minimum amount only when you do not really have enough money available, otherwise you should always pay the full amount of your bill.
How to Pay the Credit Card Bill?
You can pay the credit card bill directly through Internet Banking, or you can pay your credit card bill with the help of Third Party Payments Applications like PhonePe or Google Pe
Apart from this, you can pay your credit card bill offline also by going to Direct Bank.
Final Words:
So friends, I hope you must have understood that why Credit Cards are bad or good. While there are many advantages of credit cards, there are many disadvantages of credit cards as well. If you use the credit card in a smart way, then it can prove to be very beneficial for you because in this you get many offers and discounts on shopping.
The most important thing is that you must pay your credit card bill on time. By doing this you can avoid being a victim of many Penalties. In the end, I would like to say that if you have a decent job or if you have a good business, then you must take a credit card and use it sparingly, only where it is needed.
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