1. A credit card does have several advantages:-
a. It gives you the facility of making a big purchase even if you don't have the funds immediately, but are in a position to repay them in a regular manner without attracting rolling credit charges, thereby avoiding overdrawing costs on your bank account.
b. Disciplined use of a credit card is the easiest way to build a history of good credit behaviour, based on which your credit score will be assigned.
c. A good credit score will help you access other loans on attractive terms when you want them.
d. Making an online payment using a credit card is safer than a debit card where an online fraud can clean out your entire bank account which may take time to reverse and you may fall short of funds during this time.
e. You can even manage your cash flow to meet, as well as track, your regular expenses by using the credit card in a disciplined way within your budget.
a. It gives you the facility of making a big purchase even if you don't have the funds immediately, but are in a position to repay them in a regular manner without attracting rolling credit charges, thereby avoiding overdrawing costs on your bank account.
b. Disciplined use of a credit card is the easiest way to build a history of good credit behaviour, based on which your credit score will be assigned.
c. A good credit score will help you access other loans on attractive terms when you want them.
d. Making an online payment using a credit card is safer than a debit card where an online fraud can clean out your entire bank account which may take time to reverse and you may fall short of funds during this time.
e. You can even manage your cash flow to meet, as well as track, your regular expenses by using the credit card in a disciplined way within your budget.
2. Having said that, a credit card is also a "Handle with care" instrument:-
a. You should decide whether you need to have multiple cards and, if so, how many and for what purpose, without defaulting on them.
b. It is a good idea to dedicate one card for official use, so that there is no confusion while claiming reimbursement for payments.
c. Ideally, the cards should be taken from different affiliations, after considering authorized limits, billing cycles and cost associated with them.
d. Credit cards directly linked to stores or products should be avoided since they add very little value and may even encourage spending.
e. Sign up for online/mobile reminders and automatic debit facility for full monthly bills (not minimum due) to avoid heavy rollover credit charges.
a. You should decide whether you need to have multiple cards and, if so, how many and for what purpose, without defaulting on them.
b. It is a good idea to dedicate one card for official use, so that there is no confusion while claiming reimbursement for payments.
c. Ideally, the cards should be taken from different affiliations, after considering authorized limits, billing cycles and cost associated with them.
d. Credit cards directly linked to stores or products should be avoided since they add very little value and may even encourage spending.
e. Sign up for online/mobile reminders and automatic debit facility for full monthly bills (not minimum due) to avoid heavy rollover credit charges.