Credit cards have become essential part of our financial lives. They help us have money without actually carrying money in your pockets all the time. Some credit cards also provide cash refund which is an added advantage of making a purchase using your credit card. Banks that have a tie up with the shopping markets, also provide additional discounts when payments are made through a credit card. There are various advantages of using a credit card.
But there is a downside too, credit cards do not let you keep track of your spending. They make you bankrupt sooner than you know. The bank charges and commission also come up to a big amount. This burns a hole in your pocket if adequate balance is not maintained in your account. Card companies maintain credit limits beyond which you cannot withdraw. This ensures that you know how much and where you are spending.
Before you choose a card, there are a lot of things you need to consider. They include the annual charges which you need to pay to the card company for the use of their services. Hence, pick a card which carries the lowest annual interest rate so that you do not spend a large sum in the interest factor only. Also check if the card companies have a fixed rate of interest or a variable rate of interest. Ensure you know how much you have to pay for the services.
There are cards which have the facility of annual fees, frequent flier deals etc. Frequent flier deals are for airline payments which you make through the card, they provide certain miles for free and annual fee payment is also calculated using the amount you would spend annually on shopping through the card. Card companies keep coming up with new deals hence always check that you have got the best deal and keep negotiating for a better one.
You need to look at various banks and then choose the one you want your card from, the credit limit, rate of interest and annual fees are the main areas you need to look at when you make your pick. The article shows the pros and cons of a credit card and the various deals one can choose from. It is extremely necessary to decide if you want a credit card or not. Because once you have a card and you begin using it, you might not have a track of your expenses which could eventually put you into debt.
Hence a credit card should be chosen based on the requirements as well as annual expenses of an individual. Purchasing decisions should be taken into consideration and only then the card should be picked. There are benefits but there are also issues like repayment of debt within the due date, change in the annual interest rate and services offered by the companies. Pick the card which charges the lowest rate, and provides the best deal. Also try to cut down on unnecessary expenses so as to save the interest charged by the bank. Even though you use a credit card always make sure to keep a record of the amount spent.
