How would world without credit cards actually look like?
Last Updated : Jan. 16, 2017, 3:34 p.m.
Can you imagine a world without credit cards? No na.. We are so used to making payments through credit cards that for not even once can we think of them becoming defunct. But what if someone drops a bomb on you that credit cards will hold value no more. You will definitely not be pleased. After all you use it frequently for shopping, booking flight tickets or dining in any lavish restaurant. Your credit card is an important part of your financial life, isn’t it? It acts as a magic band which rescues you every time you are short of finance. All said and done, WishFin is little offbeat and has planned to give you an interesting read on – ‘What would the world be like without credit cards?’
The world will be free of the habit- ‘Spend now deal with it later’
Many times a credit card user is unable to resist himself from buying an expensive commodity. Slowly and steadily the habit of ‘Let’s spend now and we will deal with it later’ starts developing. As a result of this, you are forced to pay a huge sum of interest to repay all the credit. This habit will go down the drain when credit cards vanish. Bidding farewell to your credit card will ensure that you have more control over your finances.
Online card fraudsters will cease to exist
Credit card fraud has been a major issue faced by the cardholders since quite a few time. Hackers are always looking to barge into the details of your credit cards. Therefore it is generally advised not to tell the PIN of your credit card to anybody. In case the world is devoid of credit cards the so-called business of hackers and fraudsters will take a major hit. This is a very good news for us.
E-commerce sites will give fewer offers
You must have received exciting offers from Snapdeal or Amazon when use you use your credit card, right? But if the world is devoid of credit cards then you must be ready to let go of the attractive offers. E-commerce sites give more offers for credit card users since they very well know that the customer will buy it even if he has no cash. A credit card provides you the option to buy the thing of your choice and pay it later within the grace period without any interest. This won’t materialise in a world without credit cards. I know it hurts but that’s true.
Banks will charge a high rate of interest on loans to make up for losses
This will come as a big shocker to you. To cover the losses caused due to credit cards becoming defunct, the bank can always charge a higher interest rate on the loans you wish to apply for. Banks have to take some bold steps to counterbalance the obsoletion of credit cards. This means you will have to pay a higher rate of interest on the loan amount you take from the bank.
People will not overspend and instead save money
Credit cards lure you into buying something even when you don’t have money. They simply encourage you to spend money which you don’t have. But the world without credit cards will be all about less spending and more saving. Buying through debit card only means spending what you have. Since you won’t have a huge interest piling up, you will end up saving a lot.
Hardships in securing a loan
You must be aware that the chances of you securing a home or a car loan depend on your usage of credit card. Banks before giving you a loan will check your CIBIL score which is a proof of your credit history. Your CIBIL Score is based on a number of factors like how many credit cards you own and how quickly you clear your credit card bills. A good CIBIL score will bear testimony to the fact that you will be able to repay the loan amount within the given tenure. It also demonstrates your financial discipline.
Difficult to cope up in times of emergency
What if your car breaks down at midnight and you have to stay at a hotel? Just in case you don’t have enough cash you will be caught in a catch 22 situation. With credit cards in your wallet, you are not required to carry a huge amount of cash. The world without credit cards will take away some of your financial security.
The demand for Personal loans will touch a new high
What if the credit cards become obsolete tomorrow? This will pose to be a big problem if you use a credit card to fulfil your personal wishes. People will start queuing up in front of the banks in order to avail a loan to meet their personal needs. The demand for personal loans will increase which can affect the rate of interest charged by banks.
So now that you have understood what would the world be like without credit cards, I hope you will use your card judiciously. Even if credit cards are discontinued, you need not bother. All you need to do is take proper care of your financial management. Use the credit card wisely but don’t let it use you.