Credit Cards: Many times people take credit cards after hearing about these offers and discounts from others. But while taking a credit card, one should know both its advantages and disadvantages, so that there are no regrets later.
Credit Cards: The trend of credit cards has increased rapidly in recent times. People find credit cards quite convenient. If you suddenly need money and do not have money in your pocket, then your need can be easily fulfilled through credit card. Also, if the amount spent is repaid within the grace period itself, then no penalty has to be paid for it. Apart from this, sometimes better offers and discounts are also available on credit cards while shopping.
Many times people take credit cards after hearing about these offers and discounts from others. But while taking a credit card, you should know both its advantages and disadvantages, and also understand how to use it properly so that you do not have any regrets after taking this credit card.
Higher interest on late payment
Credit card is convenient, but if you do not repay the amount taken as loan within the grace period, then you have to bear the loss. In such a situation, you have to pay huge interest on the loan amount. This can range from 14 percent to 40 percent annually and will be calculated from the day you made the purchase. Not only this, you also have to pay late payment fees.
Minimum and total due
There are two types of due amounts, one is total due and the other is minimum due. If you pay only the minimum due, the only benefit you will get is that your card will not be blocked, but you will have to pay heavy interest on the outstanding amount and this interest will be charged on the total amount. Therefore, if you face this situation, always pay the total due while making credit card payments.
Charge has to be paid for withdrawing cash
In difficult times, you can also withdraw cash from credit card. How much cash you can withdraw depends on the limit of your card. But withdrawing cash from credit card should be completely avoided because for this you have to pay a huge charge. Apart from this, there is no benefit of interest free credit period on cash advance.
Risk of bad CIBIL score
You may have got a good limit on your credit card, but you should not use more than 30 percent of the credit card limit. The bank considers those who spend large sums of money at once as financially weak. This spoils your CIBIL score. In such a situation, you may face difficulty in taking loan in future.
