A Credit Card Is Convenient
credit card
A credit card can be useful if used prudently. Many credit card users are hurt by their own action, not by the credit card.

Some benefits

  1. Upon signing up, there is a one-time welcome gift.
  2. No need to bring much cash, including overseas trips. Carrying much cash is unsafe in countries with high crime late like Malaysia.
  3. Spend first and pay later without interest if paid on time. The cash in hand can be used for other matters first before the due date of credit card payment. Let us say a person has a flexible housing loan on daily interest and money can be withdrawn from the loan account flexibly. Upon receiving income from work, the person can put money in the loan account first and pay credit card later to save some interest.
  4. It can be used to make online purchases.
  5. Accumulated points when spending can be used to make purchases in future.
  6. Each type of card has its own perk, for example cash back or free access to airport lounge.
  7. Automatic record keeping of expenses.
  8. Cash can be withdrawn from ATM worldwide during emergency. But this should be done as the last resort only because the withdrawal cost is high.

Precautions (so that the credit card does not backfire)

  1. Spend within our means.
  2. Pay on time.
  3. Pay the full amount stated on the credit card statement, not the minimum amount written on the same statement. Paying the minimum amount will still incur interest on the outstanding amount.
  4. Have only one card to concentrate card usage so that card annual fee can be waived upon request.
  5. Keep the credit card safely. Always remember where the credit card is placed.
Posted: 2016-09-30 by Ong Seng Aun.
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