Credit cards are good till they help you spend when you need money. But these cute looking things can be very dangerous if you do not pay the bills regularly and keep any outstanding.
Initially the banks and credit card companies lure you to take a card by displaying unimaginable benefits and attractions. They say keeping a credit card is financial freedom. Its human psychology to acquire object of desire and this is the sentiment that the credit card companies strike on. They provide exuberant credit limits to the card holder so that he gets tied to the card with debts.
A debt is a debt. Keeping a credit card means never ending headache and tension. You pay around 2 % monthly interest rate on your credit card balance, it actually means 24% or more in a year. On top of that, if you have an outstanding balance, the interest rate is applied on the total outstanding balance. You have to add the late payment fees with the capital spent to the accrued capital on which the interest rate is applied. If you keep paying just the minimum balance due every month, you will notice that you have landed up paying more than the money spent at the end of the year and still your actual spent remains unpaid. Plus you will have to pay the compoundable interest rate on your total outstanding balance. God forbid, if you spend something new on your card when you are already paying a high amount of interest rate, your new spent will be added up to the previous balance and will be charged at a weird interest rate, not the 2%. So at the end of the year, you land up with a 36% or more interest rate on your credit card bills.
Added to the weird interest rate trauma, you need to pay annual charges which are actually baseless. The writing off of the annual fee might solve a minimum balance issue for a couple of months. This means, annual fee is an added problem. And they come with the outstanding bill. That means they get added up to the chargeable capital with accrued interest.
Lets say you don’t use your card for a quarter of the year and you have no outstanding to pay off. You will still get a minimum payment to pay every month. This is called the no usage charge. This is not all; you have hidden charges in balance transfer to some other new card. You need to pay extra interest rate on cash withdrawal.
The toughest part is, if you fail to pay your credit card bills for a long time, one day you realize that you can’t pay the outstanding any longer and you are lost. Then comes the part where you start running away from the bank’s collection agency. Enter trouble. You feel like a criminal and you can’t negotiate with the collection agencies so easily. They are a pack of goons hired to dig out money from the debtors. The irony is, first the bank comes begging to you to give you a credit card. Then you go begging to them to negotiate on the final payment. As if banks have taken an oath to label you a fraud and they are bound to deplete your credit rating. A credit card is like a witch which disguises as an angel and then leads you to the darkest of dungeons to suck your blood away.
Spend what you earn and be happy. Control your desires, kill your wants and be concerned only with your needs. Avoid owning credit cards.
Linus Orakles
http://www.authorclub.info/
Initially the banks and credit card companies lure you to take a card by displaying unimaginable benefits and attractions. They say keeping a credit card is financial freedom. Its human psychology to acquire object of desire and this is the sentiment that the credit card companies strike on. They provide exuberant credit limits to the card holder so that he gets tied to the card with debts.
A debt is a debt. Keeping a credit card means never ending headache and tension. You pay around 2 % monthly interest rate on your credit card balance, it actually means 24% or more in a year. On top of that, if you have an outstanding balance, the interest rate is applied on the total outstanding balance. You have to add the late payment fees with the capital spent to the accrued capital on which the interest rate is applied. If you keep paying just the minimum balance due every month, you will notice that you have landed up paying more than the money spent at the end of the year and still your actual spent remains unpaid. Plus you will have to pay the compoundable interest rate on your total outstanding balance. God forbid, if you spend something new on your card when you are already paying a high amount of interest rate, your new spent will be added up to the previous balance and will be charged at a weird interest rate, not the 2%. So at the end of the year, you land up with a 36% or more interest rate on your credit card bills.
Added to the weird interest rate trauma, you need to pay annual charges which are actually baseless. The writing off of the annual fee might solve a minimum balance issue for a couple of months. This means, annual fee is an added problem. And they come with the outstanding bill. That means they get added up to the chargeable capital with accrued interest.
Lets say you don’t use your card for a quarter of the year and you have no outstanding to pay off. You will still get a minimum payment to pay every month. This is called the no usage charge. This is not all; you have hidden charges in balance transfer to some other new card. You need to pay extra interest rate on cash withdrawal.
The toughest part is, if you fail to pay your credit card bills for a long time, one day you realize that you can’t pay the outstanding any longer and you are lost. Then comes the part where you start running away from the bank’s collection agency. Enter trouble. You feel like a criminal and you can’t negotiate with the collection agencies so easily. They are a pack of goons hired to dig out money from the debtors. The irony is, first the bank comes begging to you to give you a credit card. Then you go begging to them to negotiate on the final payment. As if banks have taken an oath to label you a fraud and they are bound to deplete your credit rating. A credit card is like a witch which disguises as an angel and then leads you to the darkest of dungeons to suck your blood away.
Spend what you earn and be happy. Control your desires, kill your wants and be concerned only with your needs. Avoid owning credit cards.
Linus Orakles
http://www.authorclub.info/
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