Are you aware of the dangers of owning a credit card

Saturday, June 6, 2009

Are you aware of the dangers of owning a credit card

Everybody who resides in a city has a credit card. Most of them now a day carry multiple cards and try to collect more if they see an opportunity.

Credit card companies also are keener to offer credit cards to those who already have a card.

There are two reasons for it.

Firstly, the credit card owning criteria of every credit card company is more or less, the same, and; therefore, the existing card holders are easy targets to sell their cards. Secondly, existing card holders are much easier to convince.

Though, it’s easier to accumulate credit cards, the users are more prone to ignore the dangers of owning a credit card. It’s often seen that credit card users had complained of been cheated by the credit card companies.

The reality is often ignored. What are the dangers of having a credit card that is being talked about?

• The first pitfall here is the interest free period of a credit card. A new credit card holder knows about the 50 day free interest period. He thinks that he could purchase stuffs from the market and return the money within 50 days, and he would be fine. There won’t be any interest charged on it. The reality could be different.

The credit card owners should know that the interest free period starts from the next billing date. To see a billing date is exceedingly crucial. Any purchases beyond the billing date will ensure that your credit free period decreases.

It would mean that if a credit card has a 50 day free credit period, then the credit card holder gets 30 days free credit period till the billing date, and another 20 days from the billing date to clear your dues off.

For instance, your billing period stands as 11th May, and you made credit card purchases on the 10th of May, then you would get one day as your credit free period, and another 20 days to pay it off. That would suggest you got 21 days altogether as credit free period.

 Thus, it becomes extremely helpful to have your calculations right before you go for a credit card.

• A credit card is a medium through which you borrow money or goods. Though everybody knows it well, yet very few realize it. At the end of the day, it’s not your money. You need to return the money at the earliest. The sooner you realize, the better it is for you.

• Always keep the credit card helpline numbers on your diary, or on your mobile phone, and call those helpline guys and tell them if your card gets stolen or lost. If not, your card could be used by someone else and you might end up incurring losses.

Finally, remember to be quick with your payments. Any delay in payments can be dangerous to your financial health. The interest rate gets compounded before you could even realize it.

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