Outlook Money
Credit cards offer a lot of convenience, but they do come at a cost. Keep note of these eight facts before taking a new credit card.
Credit cards come with a high rate of interest. If the user fails to pay their credit card bill on time, they are liable to be charged with an interest rate that could be as high as 2-3.5 per cent per month. This accumulates to a significant amount yearly.
Low CUR is what one should aim for in order to maintain a good credit score. One should not use up more than 30 per cent of the credit limit available on the card.
Many people use multiple cards to keep track of their CUR, but having too many cards might turn out to be a risk, and using one card to pay off the other is a debt cycle one should avoid getting into.
Credit cards come with rewards with every purchase. These points can be redeemed as coupons or discounts.
Credit cards also extend to pre-approved loans, allowing users to borrow money without documentation.
Credit cards also offer the facility of converting large purchases into equated monthly instalments (EMIs).
Credit card cash withdrawals are costly due to high fees and immediate interest, making the facility best avoided unless absolutely necessary.
Annual fees vary, and true zero-fee cards are rare; assess costs versus usage to decide if the card justifies the expense.