Huge disadvantages are hidden in the advantages of credit cards!
From online to offline shopping, there are many offers on all credit cards. These offers claim to save you money. The best thing about a credit card is that you can buy things on EMI. Well, you need to know that for many people, this EMI is the worst thing about a credit card. Now many credit cards have also come which allow payment of every transaction in 3 installments. Keep in mind, even if you don’t take no cost EMI, a little carelessness can land you in a debt trap.
How people get caught in credit card debt trap
Debt trap means debt trap, which traps those who like to spread their legs more than a sheet. Human desires are unlimited, but the source of income is limited. In such a situation, when it comes to buying a product in EMI on credit card, often people buy goods only after looking at the EMI of one month. In this way, he buys many products on EMI and on seeing every month the EMI of many products together starts eating a large part of the salary.
Let us understand the game of date trap with an example.
Suppose you bought a mobile worth Rs 60 thousand in the month of January on 12 months no cost EMI. That is, you have to pay only 5 thousand rupees every month. Next month you also bought a refrigerator of 30 thousand on no cost EMI, the installment of which is Rs 2,500. On the occasion of Holi in the next month i.e. March, you also bought furniture worth 1 lakh on EMI. That is, your EMI will be around Rs 8333. Meaning, after only 3 months, out of your total income, about Rs 15,800 will start going in EMI. This situation will continue for the next 9 months.
And then you will be helpless in front of the banks!
In the meantime, if you have to buy something else and take that too on EMI, then even more money will be deducted from your salary. At the same time, you will have to spend money every month for the rent of the house, the school fees of the child, petrol, milk, vegetables, ration, mobile bill, electricity bill to go to your office. You will not even know and you will get caught in a debt trap without paying any interest. In the meantime, as soon as you have a shortage of money in a month, then you will have to spread your hands in front of these banks with a whiff and the result will be that this time you will be ready to pay as much interest as the bank asks for.
Never use a credit card for these 5 things
Credit Card Tips: Never use credit card for these 5 things, you will have to pay to take it!
Now understand how banks earn even from EMI without interest
When a bank talks about giving you a credit card, it counts many benefits with it. Sometimes a gift is also given along with a credit card. Some cards are converting every transaction into no cost EMI of up to 3 months. As you use these cards for more and more EMIs and get caught in the debt trap, then later on, take a loan from them as well. In this way, now it is the turn of the bank to recover everything and earn profits. Many a times, you have to take another loan to repay one loan and a third loan to repay the other, as a result of which now your EMIs become more, that too with interest.
How to get out of credit card EMI debt trap
If you too are caught in the trap of EMI, then first of all, rein in your dreams. Spend money only on those things without which work cannot be done. In such a situation, you should also consider other sources of money. If possible, start every effort to increase your earnings. You can also do overtime for this. Keep in mind, as soon as you realize that you are in a date trap, you have to do two things immediately. One is to reduce your expenses, secondly you have to think of ways to increase your earnings, otherwise if an emergency comes, then this debt trap can prove to be like a swamp for you.
How to benefit from credit card?
The biggest advantage of credit cards is for those people who pay the entire bill of their card every month. That is, you should not have any EMI on the card, even if it is no cost EMI. Such people also get the benefit of cashback, reward points and gifts received while taking the card. If you don’t have the money to pay the bill, don’t spend with a credit card.
This strategy will make you silver
If you make a specific strategy for using credit cards, then you will also get all the benefits of credit cards and you will never get caught in a debt trap. Even No Cost EMI or Interest EMI will not harm you. For this, you should have a separate bank account and from that you pay the bills of each of your cards. Whenever you buy an item, whether it is on EMI or not, transfer the entire amount of the cost of that product to another account. When buying any item, keep in mind how much money you have in the first account. Shop with as much money as you have and never withdraw money from your credit card bill paying account. That’s all you have to do and you will get all the benefits of a credit card and not fall into any trap.