Credit Card Myths and Realities

Arvind Katoch
 


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Credit cards are here for long times. Lots of people use them. However, still a doubt for credit cards exists in our minds. We see many people come up everyday with the credit cards frauds and losing their money. Here, whom should be blamed, the credit cards or the user. If we see deep inside this matter, then both are responsible for it

Credit cards, as promoted are the alternative for hard cash. We don’t require carrying cash. We can pay our bills or use them for cash on emergency. Main advantage with credit cards is that unlike debit cards, they are not directly attached to our bank account. We require paying the money either completely or in partial installment after some time.

If we pay back all the money used in some particular period, we are not charged any interest. Moreover banks provide lot of schemes like reward points and money back offer. All these things look very attractive. But the reality is not as good as it appear to be. Many people fall in this misinformation’s and found themselves in difficulties.

Is this a fraud? If not then by these difficulties come. The main reason behind it is that rule and regulation related to cards are difficult and sometimes misleading. For example bank says that the bills paid in 50 days will be interest free. Bank counts its 50 days from its billing date and not from the date you have purchased the item.

For say you have purchased item on 22nd of the month and your billing date is 25th of month. Then bank gives you 20 days from billing date to pay the balance and not from the date, you have purchased the item. Therefore you got only 23 days. But if you purchase goods on 26th, then your bill will be generated on 25th of next month and you are allowed 20 more days to pay the bill. Thus you got complete 50 days. Many people are not familiar with these formalities.

Moreover bank says you to take your balance to next month by paying some minimum amount. This is known as revolving balance. It looks very attractive, but it has its drawbacks. First you don’t get interest free on purchases if you are in revolving balance. So people got in this trap and land up in huge balances.

Recently Supreme Court of India has warned the banks to give the clear details and send the bills on time. It has told to the banks that if information’s are misleading or bill reached late, then the customers will not be responsible for it.

Moreover credit card frauds are very much common these days. Recently a Indian BPO employ was found selling the detail of British card holders. Card is like cash, anyone who has the number and security code can miss use it, even if he may not possess the card. So we require using it safely. and not allowing any body to know it. Many replica sites have come up, to just steal our card information. But card like visa has introduced net card with limited liability for it.

Nutshell credit card has its benefits and disadvantages. But with certain awareness we can use them properly. And by following the instructions we can avoid frauds.

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