Across the world, credit cards have become a significant financial instrument. More and more individuals have credit cards. Some individuals have given more than one card in their name. Though credit cards are gaining popularity among Indian consumers, people typically do not bother to understand the card's terms and conditions. Many individuals who want a credit card do make an impulsive decision to own it.
People are often ready to opt for a credit card because it is provided for free by the bank. Some people go for credit card because their friends, family members, or colleagues hold the card from the same bank.
You must not ignore the terms and conditions associated with your card. After all, you are going to make payments at the end of the month. You should know some important stuff before you apply for credit card.
- You can never forget that your credit card is not a replacement for growing your earnings or purchasing power. Besides, you should use it to repay the money you borrowed. You can also get into trouble with too many credit cards if you cannot make the payments on time or make minimum payments to keep the flow running.
Not only would it affect your credit score, but it will also make your CIBIL negative. It is not an issue to have two to three cards, but it is certainly a concern to have more than three cards with a long outstanding history.
- Most individuals offer a reason for owning more than one card because now they can more easily control their funds. The fund transfer facility can be used to transfer high interest rates to lower rates. You should still accept the transfer charge or other costs connected with the transfer of the balance. What would be the late fee penalties in that bank if you cannot make payments of your unpaid balance on time?
- If you have opted for a credit card only because of the rewards offered, it is a wrong move. Based on your needs, you can pick a card, not because it gives you many incentives. Most of the cards offer their customers various kinds of incentives and benefits for spending a particular amount.
It is nice to get discounts and special rebates on transactions, but if you pay a higher interest rate on the outstanding balance, it is not wise to use the card to collect rewards.