A credit card is a payment method, where the customer or user can obtain a large amount of the fund to make any purchase or availing any services while holding no cash available in hand. It charges a certain amount of tax or surcharges depending on the amount you are spending. To utilize the benefits of it one has to take a proclaimed loan given by a bank. Which can be recompensed within a fixed timeline applied with certain charges added in the net loan amount. There are a few terms and conditions proposed by the bank that are needed to be maintained by the borrower.
The liquidity service of credit cards allows users to go beyond their limited income margin and make purchases to live a satisfied lifestyle. Though they need they need to be sincere the repayments of the loan taken. If the monthly repaying is delayed the extra charges will be applied, with the other consequences like-low credit score. Which will affect the purchasing ability in further future? Similarly if your credit record I well maintained, then there are reward points and offers to be availed.
Credit card uses in Asia
The number of the credit card users in any country depends on few factors such as market economy, the banking system, net income, lifestyle, spending income, lifestyle, spending behaviour, qualification to get permission for using a credit card etc. Though it is a rapidly accepted facility nowadays. However, in Asian countries, there are cities that do not accept or rely on such electronic payment methods. This moderate acceptance of it is diminishing with the new emerging financial organizations that help to encourage or influencing more users to use credit cards besides debit cards by giving tempting offers that come with the use of a particular credit card. One of the reasons for not accepting it can be the economic backwardness of many Asian countries.
There is a larger part who do not connect with banks to avail the primary facilities given to them or sometimes do not even have an account in banks. Also, the low margin incomes of the people do not allow them to penetrate at it. As it takes account of the income and expenditure of the borrower before issuing the loan. We can find low rates of consumer eligible for accessing it in most of the cities in Asia. Many do not trust credit card payment for small transactions over cash payments such as in small food courts, transporting etc.
Although there are exceptional uses of it in some countries can be observed, while others depend on debit cards as a suitable option. These slow adoptions are to be mended by the financial organizations only. If they create new strategies and alluring services that will make the people take a step ahead in using credit cards over debit cards. Credit cards frauds are often noticeable which reduces the chance of gaining users trust in using it.
Advantages
1. It helps you to go beyond your financial credibility to avail services that are desired, by providing low-cost loans.
2. Accepted globally, that helps in many aspects such as while travelling.
3. Saves time, while you have no time at all to hunt down for ATMs.
4. Your expenses are handled expertly, providing you with an accurate statement of your expenses in every month.
5. Purchases are safe and hectic free. Bank will look after if any defect is found.
6. It does not bind your limitation to expenses.
7. Can be a lifesaver by generating funds in an emergency.
Disadvantages
1. It charges higher rates of interests and if monthly dues are not paid the extra charges applied.
2. It allows or sometimes makes you spend way beyond your actual financial capacity, which can pose a future threat.
3. One has to be trustworthy or eligible to all the conditions imposed by the bank in terms of getting a credit card.
4. It can be used in ATMs globally only if a higher and extra rate of interest is charged.
5. You can easily lose track of your expenses and end up screwing your budget.
6. Credit card frauds can cause you immense stress and consume your valuable time.
7. Unlike debit cards, it charges an annual fee to be paid. Though it depends on the variety of cards offered by banks. One needs to carefully observe the terms and conditions to avoid such issues.
It often gets a negative appraisal. But if used with sincerity then it is a great helping hand to solve financial issues. Besides being risky it is an agreeable way to manage your finance. One can compare facilities given by banks to improve credit scores. Overuse of credit card can be a problem observed in young people where they overspend out of social competitiveness in order to maintain a particular lifestyle. In spite of having various drawbacks, it is being used and accepted largely in contemporary time. The best use in solving immediate monetary problems. In return, it demands customers loyalty by paying their monthly dues.