We all use credit cards as a plastic money instrument, where we flash it out for almost all of our transactions. But have you ever imagined that when used wisely, a simple credit card can be used as an instrument by which you can a lot of money? Yes, with a dollop of smartness and financial wisdom, this goal is not a far-fetched one. These days multiple credit cards have become the norm of the day. People aren’t satisfied with one or two credit cards to the most, as multiple credit cards offer a powerhouse combo of different features, in addition to a wider credit limit, something which is very desirable by all credit card users. As a result, our country has given birth to a generation of generous credit card fanatics, that aren’t shy of possessing a number of credit cards, sometimes as high as 70 in number, from different credit card issuers. These people are hesitant to use money as a mode of payments as they claim that when credit cards offer them financial flexibility as high and as flexible with a large credit limit, who would be bothered to carry cash all around? Credit cards are widely used for all business transactions, especially at a time, when instant cash has become a need for the day. As people are uncomfortable carry large amounts of cash with them, they use credit cards to make such transactions, propagating safety, ease and convenience at the same time. Thus, they also avail accessibility to the much coveted “working capital” at absolutely no extra cost! Also, who can forget the lure of reward points offered by credit card companies?
Although a list of the pros of having multiple credit cards can get you easily tempted, remember that managing them can be quite a painful business. People who take the business of credit cards separately even hire separate accountants to look exclusively after the due dates of these credit cards, ensuring that all payments are made and cleared in time. They are also wary of billing cycles and keep a lookout on cards that can provide the highest interest free credit period, thereby making it profitable for their bosses. Thus, these people understand and comprehend the benefit of having a sparkling and scot-free credit rating, which comes with making all due payments on time and good financial discipline. Banks can show a little leniency if a customer shows promising records in all his transactions. Another reason why credit cards have risen in popularity can be due to the convenience of carrying credit cards while going on foreign travel trips. The country has seen a rise in the number of frequent flyers which can be attributed to the global demands of professionals in the country as well as a rise in the standard of living. While using credit cards for these purposes, people get a lot of exciting deals and offers as well, making credit cards a safe bet any day.
While credit cards have promised its users unprecedented flexibility and freedom, it is up to us to make it a profitable tool or a dark hole of debt trap. In order to use credit cards with prudence, in case you are caught in a debt trap, stop using your credit card and do not opt for personal loans or any other type of loans to repay that debt. Use cash until you are safely out of the debt trap to understand your spending pattern. If you unable to repay the amount in a lump sum, then request the bank to schedule the repayment of your amount in EMIs. Most banks would willingly offer this facility as it gives them a sure chance that they will get their money back. In case you are short of funds to repay the debt, try and liquidate some of your assets, as this will save you from some of the spiraling interest rates. When you are in a debt trap with multiple credit cards, start repaying with the highest due amount to save yourself from the high interest rates.