Santa Claus comes around just once a year. In the meantime, there are Credit Cards.
  • Credit Card BYTES FROM OUR KITCHEN

    Advantage & Disadvantage of Credit Card

    A credit card has become an indispensable part of our lives, with its ease of use and convenient pay-back options. The discounts, offers and deals that a credit card offers are unmatched by any other financial products, and spell a bonanza for the wise user. However, credit cards can becomes debt traps if not used correctly, or if you spend more than you can repay when the bill comes around.

    If you’re new to the world of credit, here’s a list of the advantages and the disadvantages associated with your little plastic card.

    Advantages of Credit Cards:

    Easy access to credit- the biggest advantage of a credit card is its easy access to credit. Credit cards function on a deferred payment basis, which means you get to use your card now and pay for your purchases later. The money used does not go out of your account, thus not denting your bank balance every time you swipe.

    Building a line of credit- credit cards offer you the chance to build up a line of credit. This is very important as it allows banks to view an active credit history, based on your card repayments and card usage. Banks and financial institutions often look to credit card usage as a way to gauge a potential loan applicant’s creditworthiness, making your credit card important for future loan or rental applications.

    EMI facility- if you plan on making a large purchase and don’t want to sink your savings into it, you can choose to put it on your credit card as a way to defer payment. In addition to this, you can also choose to pay off your purchase in equated monthly instalments, ensuring you aren’t paying a lump sum for it and denting your bank balance. Paying through EMI is cheaper than taking out a personal loan to pay for a purchase, such as a television or an expensive refrigerator.

    Incentives and offers- most credit cards come packed with offers and incentives to use your card. These range from cash back to rewards point accumulation each time you swipe your card, which can later be redeemed as air miles or used towards paying your outstanding card dues. Lenders also offer discounts on purchases made through a credit card, such as on flight tickets, holidays or large purchases, helping you save.

    Flexible credit- credit cards come with an interest-free period, which is a period of time during which your outstanding credit is not charged interest. Ranging between 45-60 days, you can avail free, short-term credit if you pay off the entire balance due by your credit card bill payment date. Thus, you can benefit from a credit advance without having to pay the charges associated with having an outstanding balance on your credit card.

    Record of expenses- a credit card records each purchase made through the card, with a detailed list sent with your monthly credit card statement. This can be used to determine and track your spending and purchases, which could be useful when chalking out a budget or for tax purposes. Lenders also provide instant alerts each time you swipe your card, detailing the amount of credit still available as well as the current outstanding on your card.

    Purchase protection- credit cards offer additional protection in the form of insurance for card purchases that might be lost, damaged or stolen. The credit card statement can be used to vouch for the veracity of a claim, if you wish to file one.

    Disadvantages of Credit Cards:

    Minimum due trap- the biggest con of a credit card is the minimum due amount that is displayed at the top of a bill statement. A number of credit card holders are deceived into thinking the minimum amount is the total due they are obliged to pay, when in fact it is the least amount that the company expects you to pay to continue receiving credit facilities.

    This results in customers assuming their bill is low and spending even more, accruing interest on their outstanding, which could build up to a large and unmanageable sum over time.

    Hidden costs- credit cards appear to be simple and straightforward at the outset, but have a number of hidden charges that could rack up the expenses overall. Credit cards have a number of taxes and fees, such as late payment fees, joining fees, renewal fees and processing fees. Missing a card payment could result in a penalty and repeated late payments could even result in the reduction of your credit limit, which would have a negative impact on your credit score and future credit prospects.

    Ease of overuse- with revolving credit, since your bank balance stays the same, it might be tempting to put all your purchases on your card, making you unaware of how much you owe. This could lead to you overspending and owing more than you can pay back, beginning the cycle of debt and high interest rates on your future payments.

    High interest rate- if you do not clear your dues by your billing due date, the amount is carried forward and interest is charged on it. This interest is accrued over a period of time on purchases that are made after the interest-free period. Credit card interest rates are quite high, with the average rate being 3% per month, which would amount to 36% per annum.

    Credit card fraud- though not very common, there are chances you might be victim of credit card fraud. With advances in technology, it is possible to clone a card and gain access to confidential information through which another individual or entity can make purchases on your card. Check your statements carefully for purchases that look suspicious and inform the bank immediately if you suspect card fraud. Banks usually waive off charges if the fraud is proven, so you will not have to pay for purchases charged by the thief.

    How To Use Your Credit Card Right:

    To avoid being debt-laden due to unfettered spending on your credit card, keep the below tips in mind:

    • Read the fine print so you’re aware of all the charges and conditions that govern your card.
    • Don’t spend more than you can pay back.
    • Avoid putting daily purchases on your card so that you’re aware of how much you’re spending.
    • Periodically check your credit limit and rein in spending when you’ve crossed 40% of your available credit limit.
    • Choose an EMI option for large purchases put on your card to avoid having to pay interest on outstanding card amounts.
    • Always keep at least 40% of your credit limit for emergencies.
    • Plan your purchases and use your card only for planned purchases. Avoid impulse buys on your credit card.
    • Always try to pay your credit card bills in full each month to avoid the interest charges.
    • Never miss a card payment, as this will result in higher charges and a hefty penalty.
    • Approach the bank if you’ve overspent on your card. They could help you devise a pay-back plan with a fixed rate of interest to avoid you falling deeper into debt.

    Use the above tips to avoid the pitfalls of card debt so you can enjoy a stress-free future with your credit card.

    Advantage & Disadvantage of Credit Card Reviews

    • ICICI Bank Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      I have been using ICICI bank credit card for while, there service is good, they have not charge any annual fee in this bank ,and i am happy with my credit limit which they have given in this card and they provide good offer and discount in shopping and in fuel , overall service is good.
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 21, 2019
    • Standard Chartered Bank Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      I have been using standard chartered bank credit card for an while, they have not charged me annual fee in this card , as it is life time free credit card, and i am happy with my credit limit they have given me in this card, and there overall service is good.
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 21, 2019
    • SBI Cards Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      I have been holding SBI credit card for long time, they have charged me annual fee in this card. but it use to get revise it like there is waived off option is available in this card, if i spend certain amount then my annual fee will get waived off, i am happy with my credit limit they have given me good limit, there service is good.
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 21, 2019
    • Citibank Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      I have been using Citi bank credit card for an while, they have charged me annual fee in this card,but there is waived off option available in this card,like if i spend certain amount then my annual fee will get waived off, and i am happy with the credit limit they have given me in this card,there overall service is good.
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 21, 2019
    • Axis Bank Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      I have been using Axis bank credit card recently, they have not charged me annual fee in this card, as it is life time free card, and i am happy with the credit limit they have given me in this card, the reason for choosing this bank credit card is because they provide me good offers and there service is good.
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 21, 2019
    • HDFC Bank Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      I have been using HDFC credit card recently, they have charged me annual fee in this card, but there is waived off option available in this card ,like if i spend 90,000 in an calender year,then my annual fee will get waived off, and i am happy with the credit limit they have given me in this card, and they are giving good on line shopping offers.
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 21, 2019
    • Kotak Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been using Kotak mahindra platinum bank credit card for an while,they have not charged me annual fee in this card, as it is life time free credit card, and i am happy with the credit limit they have given me in this card, and they have not giving much good offers, only for shopping this card is useful.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 21, 2019
    • Citibank Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been holding Citi Rewards bank credit card , they have charged me annual fee in this card they have charged me up to 500 rupees and annual fee,but there is waived off option available in this card, like if i spend certain amount they my annual fee will get waived off, and they have given me good credit limit in this card, and i am happy with reward point they use to give good reward points.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 21, 2019
    • HSBC Bank Credit Card
      "Good Card"
      0.5 5.0/5 "Blown Away!"
      There are many offers are going on and there is no annual fee hence i have opted this card. I have received the card on time. I got my first month bill and the statements are clear. I used to receive a promotional updates to my mails. Once i spoke with customer care and its easy to connect.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 21, 2019
    • ICICI Bank Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been using ICICI bank credit card for long time, they have not charged em annual fee in this card ,as it is life time free credit card, and i am not happy with the credit limit ,i want to extend my credit limit, and the best thing is there offers they give good offers in regular basis.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 21, 2019
    • SBI Cards Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been using Sbi credit card for long time,they have charged me annual fee in this card, but there is waived off option available in this card,like if i spend certain amount then my annual fee will get waived off ,and i am happy with the credit limit they have given me in this card, there offers are good.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 21, 2019
    • Citibank Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been holding Citi INDIAN OIL bank credit card for long time, they have not charged me annual fee in this card as it is life time free credit card, and i am happy with my credit limit they have charging me in this card, there service is good, they give good offers in fuels, like in petrol they use to give good cash back and even discount.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 21, 2019
    • HDFC Bank Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been using HDFC credit card for long time,they have charged me annual fee in this card, but there is waived off option available in this card, as i spend certain amount then my annual fee will get waived off , and i am happy with the credit limit they have given me in this card, and even there offers are good.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 21, 2019
    • Bank Bazaar Credit Card
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been using bank bazaar service from past 1-2 years ,there service is good, and i came to know through on line, as i usually check the credit score and compare the bank which one would be good, i have been using mobile application, it is easy to access, and there application is user friendly, overall service is good.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 21, 2019
    • Axis Bank Credit Card
      "Excellent card"
      0.5 4.0/5 "Great!"
      I have applied for Axis bank credit card recently,the reason for choosing this bank credit card is that they give good offers in on line like in flip kart or amazon site i use to get good cash back,and they have charged me annual fee up to 250 rupees, but it is kind of life time free card,like i use to get offers or points in it , and i am happy with credit limit they have given me in this card, they have given me 25,000 i am satisfied with it,and there service is good.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 21, 2019
    • Bank Bazaar Credit Card
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been using bank bazaar service for first time, i came to know about bank bazaar service through on line, and i have been using both website and mobile application which was easy to access,and even i have applied for credit card recently, there customer team had done time to time follow up with me regarding my application.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 21, 2019
    • SBI Cards Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been using SBI credit card from long time, they have not charged me annual fee in this card , as it is life time free card i have got ,and i am happy with the credit limit they have given me in this card,and there customer service is good, they provide good offers.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 21, 2019
    • ICICI Bank Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been using ICICI bank credit card for long time, the reason for choosing this card is that they are giving very good service, and they have not charged me annual fee in this card, as it is life time free credit card, and i am happy with the credit limit they have given me in this card, and there customer service is good, they use to give good offers .
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 21, 2019
    • Bank Bazaar Credit Card
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been using bank bazaar service from past six months, and i came to know about bank bazaar service through on line, as i was checking my credit report through it, and recently i have applied for credit card through bank bazaar , and i have been using mobile application ,it is easy to access and there application is user friendly application.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 21, 2019
    • HDFC Bank Credit Card
      "Bad experience"
      0.5 2.0/5 "Expected more"
      I have been applied for HDFC credit card recently, i am not happy with there service , like i have applied for regalia first card and they have given me club miles card ,i asked the customer care to change it they are not responding me and not resolving my issue , i am going to cancel this card now,i am not satisfied with there overall service, i had bad experience with this bank.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 21, 2019
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