Plastic Money- Credit Cards

The year I turned 18... I was in for a shock.. ofcourse... apart from the fact that all major efforts were made so that I acquire a driving licence... my father got me Credit Card... ofcourse the card was under a major card which was that of my mom.

I was excited as hell... and during the first one and a half years of getting a card.. I became a spent thrift... that was till the date my father put his foot down and told me that I got a credit card for EMERGENCY (there was a major stress on this word..) and that its not meant for shopping away anything and everything.

Last year- when my dad was hosptalised...he payed off whatever that our policy could not cover using his credit card... and later took up a personal loan so that he could pay off to the credit card company.It was the that I realised- Plastic is much more expensive than paper. Mastercard has made such great Ad's for promoting their cards that young India can easily fall for the trap called the credit cards. I am not saying that owning a credit card is bad... as a matter of fact- I think its a great Idea to have and spend on your card only if you have enough bank balance to pay it off. My uncle only spends on his card- His reason is that it helps him keep a record of where and what he spent and he has more than enough in his account and pays off his credit card debt every month.

Most of the credit cards charge you upto a 2.95% interest a month... that amounts to 42% in a year..and here you thought that loans have become cheaper.This charge is when you dont pay up your monthly dues...but then the credit card business works mainly on those people who are not so diciplined and revolve their credit... so if you owe the credit card company say 20,000 rupees and pay the minimum amount of 5% then you'll be paying that loan off in 11 years with an interest of over 24,000 rupees.

Its a disastrous situation when it comes to revoving credit. Most of us have a great job and when ever we spend a huge amount the credit card company sends an sms asking us to repay that amount in easy installments... and we withouth thinking much about it... just say a yes... the fact that needs to kept in mind is the Interest rate...

Navlakhi of International Money Matters says that - One should clear out their Credit card debt before making any further investment. Take up a personal loan at lower interest and pay the Credit card debt.

It has been sighted that stress and depression have been called the causes for excess shopping and thus its called retail therapy. But one must take Financial advice to clear these debts. And then most of us dont even realise that we can repay the credit card dues we just fall for the easy installements.

For all those who are ready to apply for a New Credit Card, just dont jump the Ad wagon...

Remember- There is nothing wrong in borrowing money...when you really need it... just beacuse you have the means that doesnt mean that you should conjure up a bad debt and have thugs pounding on your door, asking for a recovery. And yeah... debt is not bad only bad debt it bad...

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