A lot of people associate credit cards with evil. The much maligned credit card will be the first to be burned on the stake when people seek to provide example of bad debts.
A lot of people also use the fact that they don't use credit cards as some sort of a "badge of honour" when talking about good financial practice.
Are credit cards really the villain of the 21st century?
Recently there is a new kid in town called debit cards. There is a lot of hype about debit cards as more and more people are into cashless shopping, and many more are less inclined to shop on credit.
Are debit cards really the knight in shinning armour?
I'm not going to explain about credit and debit cards here. Neither am I going to do a comparison between those two and declare a winner.
Enough have been written by others of the pros and cons of both. I have provided some links at the end of this chapter if you are interested to find out. I recommend that you read all of them. Those are very short and straight to the point articles. Then you can make your own decision.
Coming back to the issue on hand. Are credit cards the source of all evils?
Personally I think credit card is one of the best modern inventions.
Who will allow you to buy stuff and use them for a month before asking for payment? Their 0% easy payment scheme even allow you to spread the payment up to 6, 12, 24 months without incurring any extra costs. Their points system will reward you with free stuff without doing anything extra!
I think credit cards are awesome!
A lot of people blame the credit card when they cannot get out of self-made debt-hole. It is always easier to blame others for your own weakness.
As I mentioned earlier, there is no magic formula to cure lack of self discipline. Even the best laid plan will go awry without the strong will to follow it through.
The key to a successful relationship with your credit card is to make full payment on time every time. Never ever be tempted to pay less than the full amount.
Another thing that is not so well known about the benefit of a
credit card is their "balance transfer" promotion. Sometimes when a
bank wants to steal customers of other banks, they will offer 0% interest for
the balance transfer to be paid within 6 months.
What this means is if you buy stuff using credit card of Bank A, Bank B will pay your debt in full to Bank A and allow you to spread the payment to Bank B for 6 months without even a single cent extra. How awesome is that?
I admit that I have used this facility twice and bought a lot of designer handbags. All fully paid and does not even incur a single cent extra than if I were to buy them using cash.
As for debit cards, frankly I have no strong opinion of them. I have a great love relationship with my credit card for close to 20 years that I cannot see any reason why I should try something new.
Why change something that is not broken?
What this means is if you buy stuff using credit card of Bank A, Bank B will pay your debt in full to Bank A and allow you to spread the payment to Bank B for 6 months without even a single cent extra. How awesome is that?
I admit that I have used this facility twice and bought a lot of designer handbags. All fully paid and does not even incur a single cent extra than if I were to buy them using cash.
As for debit cards, frankly I have no strong opinion of them. I have a great love relationship with my credit card for close to 20 years that I cannot see any reason why I should try something new.
Why change something that is not broken?
Credit cards may be the villain of the 21st century for some people but to me
they are my knight in shinning amour. I simply love them! I truly cannot
imagine life without them.
Things you should know about Debit Cards:
http://www.imoney.my/articles/secrets-of-getting-and-maintaining-a-debit-card/
http://www.imoney.my/articles/now-you-can-spell-convenience-with-a-debit-card/
http://www.imoney.my/articles/debit-card-what-is-it-how-does-it-work/
http://www.imoney.my/articles/about-debit-card/
Debit Card vs Credit Card:
http://www.imoney.my/articles/debit-card-vs-credit-card/
http://www.imoney.my/articles/debit-card-vs-credit-card-2/
Things you should know about Debit Cards:
http://www.imoney.my/articles/secrets-of-getting-and-maintaining-a-debit-card/
http://www.imoney.my/articles/now-you-can-spell-convenience-with-a-debit-card/
http://www.imoney.my/articles/debit-card-what-is-it-how-does-it-work/
http://www.imoney.my/articles/about-debit-card/
Debit Card vs Credit Card:
http://www.imoney.my/articles/debit-card-vs-credit-card/
http://www.imoney.my/articles/debit-card-vs-credit-card-2/