How many of us experienced where we got credit card application been approved and activated even without our notice? How many of us got credit cards application approved even we purposely forgot to sign the application form? How many of us not sure why we apply credit cards? How many of us really sure about the benefits of having credit cards? Who are normally easy to get credit card application get approved?
I believe everybody have experience applying credit card(s) because this is very common for those fresh graduates with new payslip and no commitment in the list yet. Why this is very common? You may give small laugh to yourself. Hehe! This is mainly because of the approval will be very easy and fast. Furthermore, normally all these fresh graduates are baited during some promotion in shopping mall or during exhibition. Why this group are normally baited? Be frank, we'll feel extra luxurious by having credit cards and this feeling was my personal experience when started my career life. Luckily, I have experienced indirectly of using credit cards from my late father where he pays before due date. Similarly, I have experience indirectly from my friends on the bad side where they pay only the minimum amount.
Let us discuss first on the benefits that is very clearly can be seen by using credit cards. What you can get by using credit cards? Obviously we'll collect points to redeem gifts in future. Gotcha! Other than that? By using credit cards, all our expenses will be recorded in details about the dates and merchandises that we spent. All these records are printed for you free of charge. Not even a single cent is charged to you. By having this statement for your credit cards usage, we can monitor our expenses on monthly basis to improve our budget in order to achieve or at least to come closer of financial freedom. There are lot more that we can discuss on the benefits by using credit cards but I will write separate article on it very soon.
Benefits are being discussed so far and lot more to cover in future but what are the bad things of having credit cards? As briefly described on bad thing due to bad habit mainly on paying minimum amount which end-up with compounding interest with the maximum rate will be imposed on us. This scenario could happen due to lack of understanding on credit cards usage or purposely without knowing the bad impacts of pretending to be very luxurious. In very recent years, there are very huge numbers of fresh graduates are declared bankrupt due to compounded interest of huge amount spent that cannot be settled by all these youngsters. The other case, happened to one of my close friend where he bought a laptop for his sibling and paying only minimum amount by assuming that minimum payment is reflecting easy-payment with no end point.
Using credit cards exactly like using knives where different knives having different applications; to cut meat, fruits, etc. If we use different type of knife for different application, the result will be very poor. If we wrongly use the knives to scratch our back due to itchiness then big disaster is waiting for us. Hence, choice is in our hand and choose wisely before act. How to do so? Invest on knowledge first before take action.
