Credit Cards are a blessing and a curse and
managing them well is a hot topic that is always
debated about. Whether you are considering getting one or already have
one and are looking to get another, managing Credit Cards seem like a daunting
task. Don’t worry; we are here to help
you pick the Best Credit
Cards
in the market in addition to demystifying some of the myths surrounding them.
Credit Cards are an important financial
solution which helps you pay for tickets online, shop, even book groceries and
have them delivered. Credit Cards provide individuals with the opportunity to make important transactional
decisions well and instantaneously. However, if they are not usedjudiciously, they can spell financial doom and
worrisome debt. So out of the hundreds of options available out there, how do
you pick the best Credit Cards? By carefully evaluating all the
options available to you by different banks, you can pick one that suits your
needs.
Before you find a suitable card, you need to
figure out your spending patterns and analyse it before deciding on one. Apart
from this here are a few Credit Card myths you should watch out for:
- Credit Cards Cripple Your
Finances
A common misconception about Credit
Cards is that you will end up spending a lot more than you earn if you get one.
Credit Cards are firstly issued on the basis of
your earnings. Hence it is not possible to get a Credit Card with a large
credit if you have small earnings. If you spend responsible,
you will be able to use a Credit Card to manage your finances well.
- Credit Card is an Expensive
Purchase
One of the biggest myths
surrounding Credit Cards is the fact that most people are afraid to get one
because they are told that it is
expensive to get a Credit Card. Most banks provide Credit Cards in India with
no annual fees charged. Some banks like Citibank also have Credit Cards which
also offer zero lifetime fees as well.
- There is Only One Type of Credit
Card
Many banks provide Credit Cards
for different purposes. From a petrol Credit Card to a fine dining card to a
rewards card there are plenty of Credit Cards to choose from. HDFC Bank, ICICI Bank, SBI, Citibank are some of the banks
that offer theBest Credit Cards in India market. Different Credit Cards will have different rewards, so no single choice exists when it comes to Credit
Cards.
- A Credit Card Will Hurt My Credit
Score
This is a big one. Most people
believe that having a Credit Card will hurt your credit or CIBIL score. A
healthy credit score to maintain is between 700-750, so, if you get a Credit Card and spend wisely and repay on time, it will help you improve your score.
- Credit Cards are Not Secure
One of the other common Credit Card myths is that there is zero
security available in case of theft or loss of the card. This is not true. Most Credit
Card frauds occur in the first few hours of loss, so if you make a call to your bank they will block the card
immediately, and it will be defunct. Banks
such as Citibank, Standard Chartered, ICICI, HSBC, have some of the best
security systems in place to ensure Credit Card frauds are minimised.
- Credit Card Gets Spoilt with Usage
Most people believe that using a
card for long will erode the chip and it is tedious to get a new card. ICICI
Bank Coral Contactless Card and Citibank Card have contactless features which
make it easy to pay by tapping instead of swipe. This ensures that the card is well-preserved and has minimal damage.
- Credit Card Rewards Cannot be Redeemed
Different cards offer different
types of rewards and more often than not the rewards are good depending on the
points collected. Most banks also provide easy facility to redeem your points
online. For instance, the Citibank
Cashback card is designed for those who
love shopping and can get maximum benefit for spending money. Similarly, the SBI Yatra Credit Card is one of
the best Credit
Cards in the market
for those who wish to travel as there are a bunch of rewards on domestic and
international travel.
- Do Not Use a Credit Card Online
Today, most of our transactions
happen online. From booking flight tickets to buying groceries, we conduct a
lot of payments online. Another big myth around Credit Cards is that it should
not be used online as the transactions are not secure and someone may hack your
pin. Credit Cards are protected with the
highest security, and it is very
difficult to obtain details on a card so easily. Banks have placed strict rules
and processes in place so that Credit Card transactions can happen online with
zero stress.
- A Credit Limit Increase is a Bad Idea
A credit limit on a Credit Card
is given on the basis of your spending
and repayment capacity and also a couple of other factors, so most people who
already have a Credit Card do not increase their limit due to fear of
overspending. If your expenditure is in check and you can afford to payback on time, you can always increase your
credit limit as it’s not offered to
everyone.
- Reward Points are Worthless
As mentioned in the article
before, a lot of people do not get Credit Cards due to fear of spending a lot
and also because they believe that the rewards are not worth it. It can come as
a surprise that reward points can help you save a lot in the long run.
The most important document
to read before getting any Credit Cards are the terms and conditions.The finer aspects of
transactions, charges, interest rates are always
denoted in the document provided with the card or online. Now that we
have busted some of the Credit Card myths, it is prudent to remember that Credit
Cards are a readily available form of a loan
which will ultimately accrue interest and has to be utilised wisely.
