DISADVANTAGES OF CREDIT CARD

In this era, we all want to use a credit card, due to the offers available on different eCommerce websites so we have a collection of credit cards with us that are giving offers on different websites. But we have to take off something will we are using a credit card. it also comes with some disadvantages. 

What are these disadvantage we will discuss all these in our blog, so stay connect and keep reading, disadvantages comes when you are not properly using your credit card and not paying your bills on the time then you have to worry about all these things, otherwise you can be on your chill mode, and you don’t have to worry about the disadvantage of a credit card?

Disadvantages of credit card

Disadvantages of credit card

1.High-interest rates and other charges

High-interest rates and other charges

The disadvantages of credit cards are High-interest rates, it happens when you are not paying your bills of the credit card on time, then the credit card provider with a charge you with a high interest rate.

The interest rate is about  30 to 40% per annum, so care full when you are using your credit card, manage your finance in a good way so that it will be beneficial for the long run, otherwise it will put you in bad shape, and work oppositely.

There are other charges as well, it includes finance charges, late payment fees, and other hidden charges. so these are disadvantages of a credit card.

2.Bad effect on cibil score

Bad effect on cibil score

The other disadvantage of a credit card is when you default your payment of credit card it also affects your civil score, so what will happen if your cibil score gets affected, then it will not beneficial for you. In the future it is difficult for you to get the credit card and loans, so becare full about it, so it will take time to correct your score again to the same.

Also, take care of one thing, you have to pay your payment in just one payment don’t split it into two or more, otherwise, it will also affect your cibil score. We have discussed the disadvantages you can have when your cibil score gets affected. so take care of this thing while paying your bills of credit card 

Here are the questions that, whether you should buy a credit card or not, so here is the solution for you. If you using it smartly and in a good manner it is beneficial for you and gives you lots of benefits in a long run. 

But If you are not using it in a good manner then it will work like your enemy, and as we have discussed you have to go through the charges and disadvantages of the credit card.

3.To get cash from ATM

To get cash from ATM

Never use your credit card to get cash from atm, it is one of the disadvantages of it because when you get cash from the atm, from that day the interest will start counting on your payment to take care of these things otherwise you have to pay an amount with the interest on it. and you also know the interest rate of the credit card.

Only do that in very emergency cases, otherwise, I will not recommend you that. because it is not beneficial of you, if you do that, then try to repay the amount as soon as possible so that you don’t have to the interest amount. 

Here is a solution of it, if you are not able to pay your bill then the bank will give you an EMI option in which the interest rate is minimum and the tenure is more, but it is beneficial when you have done a proper calculation of the amount, and how much interest rate bank is charging to you.

If they are still charging you 36 to 40% then it will not give you any benefit, so go through all these terms and conditions of the bank other you have to brother lots of thongs  

 

4.How many credit cards you should have

How many credit cards you should have

Now the people are applying for many credit cards, some have 4 to 5 credit card but as a financial adviser, I will not recommend you these number of a credit card. 

I will recommend you 1 to 2 credit card that is more than sufficient for you. As the number of cards incenses it is hard to manage them, you have to manage a different number of things in the credit card such as annual charges, transactions, and other charges. 

Read the term and conditions it is mentioned there, hoe will the annual charges will not apply on the credit card, the minimum number of transactions you should perform to get avid charges to read all these terms and conditions before buying the credit card and go through all the advantages s and disadvantage so it.

How will you use credit cards smartly?

Use a credit card as per your payment capacity not per the limit of the credit card. because you can only pay the bills as per your payment capacity because the payment capacity is your pocket you can spend it according to your pocket, but the limit can be beyond your pocket .some credit card has the limit of 1 million but you don’t have to use all that, if you can 10k to 100k then spend according and use your credit card in a good manner.

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