Credit Card Management: A complete Solution

Credit Card

Credit Card

Using Credit Cards has become very common habit of most of the people in today’s time. It has become more popular because of different online shopping platforms and other E-Commerce channels. Using credit card has many benefits but also involved huge cost to pay. Having one or two credit cards is just OK to be used with proper management for making payment without carrying hard cash. It is also used when there is no other option to pay as last source.  But some people keep 4-5 and even more credit cards to avail the difference offers available on E-Commerce platforms.

What is the Difference between Credit and Debit Card?

Credit card is a type of loan or credit limit Issued by financial institutions to their customers, credit cards give customers a pre-set credit limit which can be used to pay for the purchases without having to pay in cash or issuing a Cheque. The credit limit of the card is decided by the financial institution depending on the customer’s credit score and monthly income. Where the the Debit Card means using a card for withdrawing your own money from your account. So this is the basic difference between the two. 

Why Credit Card?

There are a lot of benefits of having credit card e.g.

  • Easy online payment: Making payment
  • Easy offline shopping
  • Can withdraw cash from ATM
  • No need to carry Hard Cash
  • Track Record of shopping items
  • No different cash back offers available
  • Flat discounts
  • Loyalty bonus points
  • Linked insurance benefits
  • Interest free credit for specific period of time

Why to Avoid?

These are the causes why we should avoid to use credit cards:

  • High interest rate if bill not paid in time
  • High cost of Cash Withdrawal
  • Possibility of Fraudulent
  • Developing Extravagant Habits
  • Develops credit habits
  • Costs more if paid in EMI options
  • Mismanagement of Personal Finance
  • Involved Hidden Charges
  • Affects credit score
  • Debt Trap

How to Manage?

We can see that credit cards have a number of benefits but also have so many difficulties and charges and other complications. So to avoid all these complications you should be always be careful about some facts mentioned below;

  • Keep One or Two Credit Cards.
  • Fix the spending Limit up-to 30 to 40 percent of total in hand monthly salary income.
  • Be particular about payments due date.
  • Always pay full dues rather paying minimum amount due.
  • Don’t withdraw cash from ATM till is so urgent.
  • Don’t opt for EMI option if there is any possibility to settle in lump sum.

How to settle the bill if stuck in debt trap?

These are some very easy ways to settle the credit card bills:

  • Reduce spending and manage it as per your Income.
  • Personal Loan or any other Loan because it is not as much expensive as Credit Card  (and pay it quickly)
  • Borrow from Family members or Friends (pay the same as soon as possible)
  • Pay from earlier savings and enjoy the debt free life.

So now it’s clear that having Limited number of credit cards and proper management of credit card can facilitate the purchasing and day to day spending habits of individuals but again the proper management, limited spending and timely payment of dues is very important.


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