Credit card life – Riches or Rags – My experience speaks

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I landed in UAE, around 2006. Till then I was never aware of credit cards or for that matter even debit cards. It’s when I arrived here, when i started working, when I opened a bank account that’s when I was offered a credit card. Now, a newbie in a new place, with no much money in pocket, gets a credit card. What’s the first thing will you do? Talk to the banker and understand how does it work.

So here we go.

What’s a credit card?

Credit card is a card which works as your money when you don’t have real cash. Bank pays on behalf of you, which you need to pay to the bank in form of minimum payment or full settlement prior the next billing date. This is one the easiest, attractive, deceptive mode. I wouldn’t mind calling this as gambling. It is like borrowing money.

We have 1000’s of banks offering different kind of credit cards, with different offers which suits each one needs. Credit cards have become hot selling products coz of demand.

How to get a credit card?

Credit cards are issued to people with various criteria’s:

  • Income value
  • Company you are working
  • Financial condition

Points to consider while looking for a credit card:

  • Annual fee / lifetime free – these days most of the banks offer lifetime free credit cards.
  • Interest rate: honestly, I never looked into this until few years back, when I felt I have been paying every month and I am still in debt to the bank.
  • Credit limit
  • Fee – check for fees like – late payment / balance transfers / converting to EMI etc
  • Reward options: like my favorite one was when I realized I could visit MARHABA lounge at the airports basis the credit card I was holding, it was a new and amazing experience.

Pros and cons of Credit card

  • It helps you when you are really in need, especially as it helped me when I landed in a new place with minimum or no cash.
  • You don’t need to carry cash in your hands
  • You buy today, you get free days up to 55 days to pay the amount you used and it can be interest fee if paid on time.
  • Cash back option – these days most of the cards give you cash back options on most of the purchases, imagine you buy a TV worth AED 4000/- and you get 10% cash back + you get 55 days to settle this payment.
  • Complete tracking – yes, you get a detailed bill for each month, as per your billing cycle, which can help you track your swipes.
  • Free insurances – most credit cards offer free accidental insurances.
  • Status symbol – having a good limit of credit card limit was pride some years back, while now its quite common though. Yet, now there are highest limit credit cards with high end benefits.
  • Easy loans – there is a feature in most of credit cards, like easy balance transfer which helps you get instant cash which can be converted to EMI’s.
  • Urgent cash withdrawal – there will be a minimum limit set which can be withdrawn during your emergency time. (I would never recommend this coz the interest rate is pretty high)
  • easy shopping: from online shopping to trading, everything is become much easier since we have credit cards.
  • easy currencies: shopping while in foreign countries to shopping online from different countries is just so coool.
  • Pay bills: yes you can use credit cards to pay bills – electricity / school / grocery etc

Remember this:

  • Only one or max 2 cards
  • Limit your auto debit (do changes once in a while)
  • Pay on time.
  • Spend only how much you need.
  • it can be tempting in terms of buying everything you like.

How to use credit cards?

Credit cards are the most simplest and easiest modes to use.

  • Swipe and use your PIN if applicable and its done.
  • Payment notifications are immediately received on your registered mobile number.
  • 2 receipts will be generated, one for the seller and one copy for your easy reference.
  • if payment is failed, same will be notified.
  • if credit card is lost, you may call the bank and block the card immediately. Also most of the banks have insurance covered if card is stolen and if swiped unauthorizedly.

Is credit card bad for you?

I would say NO, coz it would purely depend on how you use it. For me it was beneficial, to get my driving license and my first car. I was working for a company, which was multi-national, which was listed in almost all the banks in UAE. This made it easy for the banks to give me a good credit limit, even when my salary was low. But yes, you need to be prompt to pay the outstanding, settle the dues as early as possible, coz you can never be free of paying credit cards, unless you are firm to do so.

Everything that looks attractive you end up buying when you have easy money that is a credit card. But then when you keep paying minimum amount every month, that’s the main cause of being a debtor for bank for years.

Final Words?

Nothing comes for free, so credit cards are also from that same category. But at the same time, if used intelligently then it can be a boon in disguise. It has surely helped a lot of them at various times, from paying hospital bills, to enjoying those travels, to having those food packets during the months end times just before getting salaries. So would never say don’t have a credit card, but be wise to use the credit card.

we now accept credit cards, are you the one who looks out for this line while shopping or when food is in mind? I surely do most of the times.

Practically

We hope this was a useful read, if yes, do share and comment.

Yours truly,

Queen Bee!!!

Must Read: Life after Retirement – How to Make Life Better

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