Is Using a Credit Card a Good Idea or a Trap?

Last Updated : Dec. 1, 2020, 11:59 a.m.

There are a lot of credit card users in India who prefer it for shopping and enjoying a high credit limit. But there are some individuals who have a credit card and they make unplanned use of that card. It creates a huge debt on the users and it results in the late payment of the credit card bills. On the other hand, individuals who use their credit cards in a planned way are able to easily manage their credit card bills. So, in this article, you will see whether using a credit card a good idea or a trap. Once you know the differences between these two then you will use your card carefully.

How Using a Credit Card is a Good Idea

You must see the various activities that will tell you the advantages of a credit card . After going through the following points you will realize why a using credit card is a good idea.

High Credit Limit

Most individuals apply for a credit card just to enjoy the credit limit. When they fall short of funds at the month-end then the credit cards are the only option left to manage the expenses. On the other hand, a high credit limit enables the individual to buy expensive items that can’t be bought through a regular salary.

Lender of Last Resort

Some salaried employees fall short of funds just before 5-6 from the date of their salary. So in such a situation credit cards are the lender of the last resort. They are able to manage their month’s last week’s expenses through a credit card.

Deals, Offers and Discounts

Credit Cards are a good idea because you can earn Cashback and rewards while shopping from various online websites. Even there are offers at the branded outlets where you can swipe your card for a discount or Cashback.

Reward Points

Every credit card gives you the opportunity to earn reward points on shopping. You can redeem those reward points by paying the credit card bills and shopping from the online website. So, using a credit card is a good idea because it helps you to save some extra bucks from your monthly expenses.

Convenient

As you know that every bank gives you the facility of Net Banking and Mobile Banking so you can easily manage your credit from it. On the other hand, you can monitor all your expenses through the Mobile Application or the Net Banking Facility.

How Using a Credit Card is a Trap

Here are some points that will tell you why using a credit card a trap. If you avoid the negative aspects of the credit card then you will never think that it is a trap. You must always use your credit card in a planned way. So, you must see the things that credit card users do and consider it as a trap.

Skipping Credit Card Payment on the Due Date

There are many users who don’t pay their credit card bills on time. They miss the due date and the interest-free period that results in an overburden of the credit card bills. Therefore using a credit card becomes a trap for such users. So, you must avoid the late payment of your credit card bills.

Doing Unnecessary Shopping

There is a common saying cut your dress according to the cloth so you must use your credit card as per the paying capacity. There are some credit cardholders who use their card for buying unnecessary products and in the end, they are unable to clear the credit card bills. Hence they get into a trap of paying high credit card bills.

Using the Full Credit Card

You must avoid using the full credit limit of your credit card because you will have to clear the whole bill on time. If in case you skip the due date and the interest-free period then it might affect your Cibil Score and your next application for a new credit card might be rejected.

Taking High Loan

The credit card becomes a trap for those users who convert a high transaction into credit card EMI and unable to pay the EMI. It decreases the Cibil Score and as a result, it would be difficult for you to borrow a loan or apply for a credit card in the future.

Conclusion

Now you know the reasons why using a Credit Card a Good Idea or a Trap. If you use your credit card in a managed and planned way then it will never become a trap. But if you use your credit card for making unnecessary expenses then it will always be a trap. A credit is a good idea for every individual who uses it in a planned way.