Should You Own A Credit Card?

Credit Cards provide you with hell lot of advantages but it's a physiological game that tricks :- “You to believe that you have money when you don't ”. 

You may hear from your parents that the advantages provided by  credit card are negligible in comparison to its disadvantages , they may tell you stories of their relatives who failed to pay their bills on time and suffered severe consequences like degraded credit rating, sometimes even confiscation of their assets, arrest and further extra charges for hiring a lawyer etc .

Am I telling you your parents are lying , Of-course not!!.

So Am I telling you not to use credit card ,,,Well yes, If only you don't have control on your expenditure , you are the type of person that feel proud ,taking loans to buy Iphones.. then don't use credit card , it's not a thing for you. But for everybody else it's a blessing  . But before I explain you how first you need to know how does bank profit from credit card.

How Banks make profit from You using Credit Cards?

When I was a kid and I used to ask my parents how they are getting groceries , dinner at restaurants without paying money and just sliding a card through a machine.. They used to tell me by sliding that card someone else pays the bills and you then pay him later .. I always used to wonder why would somebody do that .. What will he get .. so here's the list of things he would get :-

1. Get a 2-3% of the total bill as commission from the person you are paying to . But that's not where they are getting their most of the money from 
2. They get most of their money from late repayment of bills.. The interests they charge is over the line . Why you ask ? Because they are giving you loans without any mortgage ..usually home loans charge interest of 8-9%, education loans 10-12% and credit cards charge 35-40 %.. Can you believe it …suppose if you failed to repay a loan say of 1000rs. the next day you reach to your bank with a thousand rupees in your hand and the banks ask you for 1400 rs. Isn't that absurd.. 

In the next blog will learn about

1.  How banks keep us in dark and continue charging interests without telling us,
2. What further disadvantages you may face when you use credit card for shopping 
3. what are the advantages that they provide
4. How we could control and monitor our expenditures.
5. How we can generate passive income through credit cards.