The topic “Credit card: debt trap”, the thought of writing this piece came to me because nowadays, I have been receiving a lot of all calls from various banks asking to take a credit card of their bank. And, to make it more lucrative, they have all these offers such as free insurance (not necessary), life time free and their gold card which make no sense at all.
It doesn’t matter whether its gold or silver or a black card. Its after all a credit card, the only difference that you will find is the credit limit and may be the incentives attached when you use it more often.
I do not get this logic of having 5-10 cards when its difficult to maintain even one. I just have 2 cards , that also I use it in case of emergency or when I know I will be able to repay it by next month , after understanding my repaying capacity.
I got a friend who has 5 to 10 credit cards and he doesn’t remember how much purchasing he has done on which card. Of course, he can afford too as he has a strong financial backup. But there are people who go ahead and get more than required credit cards when they know they don’t have the power to repay.
This problem has been noticed in US as many people own minimum 10 cards and they cant pay their debts and there has been instances that people have committed suicide.
I want to ask people who get these credit cards, don’t they think twice ,whether, is it necessary? People should use the credit card after checking if the have the repaying capacity . If you see the bigger picture here, then you will realize that you will have less of debts to repay .
In India, people should remember to have debit card rather than credit card or the best example would be the condition of Americans who suffer from debts. One of the episodes in Oprah Winfrey, the famous show in star world, showed how people suffered from credit card debt and one of the family nearly had debts of $60,000.00. Thats huge when you compare it to INR.
Now, people can take few precautions before getting a credit card. One, a check is it required, second- can you can afford to have a credit card and before using the card you should check have you met your basic necessity, have done enough savings for the future and then you may use it or else you know where your going.