The advantage of credit cards is the reason why many people have this one payment instrument. Besides being practical and easy to use, credit cards can make spending so economical you know.
Some of the benefits of credit cards, such as promos and installment schemes, really help for spending. For example, there are items that you assess, but don’t buy because they haven’t been paid. With a credit card, these items can be purchased without waiting for payday first.
Although really for shopping or fulfillment of needs, credit card profits can secretly make a loss also apparently. How come? Here’s an explanation why the benefits of credit cards do not always give good luck. C’mon, pay attention.
1. Minimum payment is done frequently to make debt swell
The existence of the minimum payment feature is one of the benefits of a credit card that is quite utilized by many people. Simply pay a credit card bill of about 10 percent of the total bill, you already considered paying the installments for the month.
It must be admitted that this minimum payment really helps. Once or twice done is not a problem as long as in the following month the remaining bills and interest can be repaid. However, the benefits of a credit card on this one can make a loss if it continues to be done. The number of remaining bills continues to multiply because of the 2.25 percent interest per month.
Can you imagine not how you will have to bear the mounting debt because of the minimum payment every month ? Not to mention the next time you swipe a credit card for shopping, more and more bills must be paid. So try not to do a minimum payment. Besides, the 0 percent interest promo doesn’t automatically apply because you select the payment option.
2. Promos that have never been missed at all
One of the uses of a credit card is the zero percent installment benefit. The promotion is arguably an inseparable part of a credit card. No need to be surprised if many people are encouraged to have a credit card because of these benefits.
It can’t be denied, the benefits of this one credit card can help us save expenses. Usually shopping costs $ 500 thousand because the promo only needs to spend $ 350 thousand.
However, it cannot be denied because of promos, the desire to shop always arises. The danger is unnoticed, you become overdrawn because of continued shopping. Just try to imagine, every time there is a promo, always shopping, instead of being sparing, it will be wasteful.
Therefore, so that the benefits of this credit card can maximize your finances, you need to be picky about which promos that suit your needs. Guaranteed, credit card promos are very useful.
3. Because just a large limit, just shopping
The use of other credit cards is to help facilitate lending. Who doesn’t want a credit card with a large limit ? On average those who use credit cards certainly expect that.
Shopping or transactions in large quantities is easier than using a small credit card limit. For example just want a transaction of $ 8 million, but can’t because the card limit is only $ 5 million. It’s different if the card limit is $ 10 million, spending $ 8 million is no longer an obstacle.
Unfortunately, the benefits of this credit card can backfire is dangerous for your expenses. The problem is not to close the possibility that you might forget yourself, aka continue using your credit card to over limit.
Hopefully, if you are still able to pay your debt repayments until they are paid off. How about that? Do you want to choose the minimum payment option ? However, this solution is only a momentary helper.
Always relying on this option is not solving the problem, but adding new problems. As explained above, the minimum payment makes interest increase, which automatically makes the debt burden increase. So do not immediately spend the limit when shopping with a credit card. Adjust the amount of debt with your ability to pay installments. The maximum amount of credit is 30 percent of income.
4. Frequency of cash withdrawals
Credit card cash withdrawal fee. This feature really helps when you need a large amount of cash. As long as you happen to have a lot of rest left.
As long as it is used as necessary, cash withdrawals are not a problem. Just so you know, to do credit card cash withdrawals are charged you know. The amount is around 4 percent or a minimum of $ 50,000.
Later you must bear the credit interest of 2.25 percent if the bill you have not paid in the first month of installment payments.
Just to illustrate, you do a credit card cash withdrawal of $ 8 million. That means you have to pay a cash withdrawal fee of 320 thousand USD. Calculated pretty big right? Therefore, do cash withdrawals if you really need it so that you don’t lose.
The benefits of the credit card above are actually not to the point of making a loss as long as it is used wisely. Using a credit card is not much different from you borrowing money, aka debt. So, it must be selective which needs should be paid in installments. Easy to know the information above you become smarter shopping with a credit card.