Sunday, January 20, 2013

Credit Card:A Costly Contingous Virus!!!

In modern working areas, salary of employee had risen to large extent for corporate companies. Excess of money always tempt to spend more on unwanted products and shopping. So even bank ready to provide excess of money in credit for more than 50 days of period. Such activities of over spending attitude were motivated by credit card facilities. How dangerous would be such facilities provided by bank, which we are using it unknowingly. This article would be eye opener for such Credit card culture victims.  

High Interest Charges

One of the biggest disadvantages to using credit cards, is the extremely high interest fees charged by the credit card companies. The interest fees are always significantly higher than the cost of obtaining a traditional bank loan. In fact, many credit companies charge as high as 20 percent for any purchases that aren’t paid in full at the end of each month! The high interest charges are what keep the credit card companies in business so you need to check the fees of each particular card before you apply for one.

Temptation To Overspend

Credit cards can be dangerous for individuals who are not good at budgeting. The temptation is very easy to overspend because you don’t need to pay for your purchases upfront. Regardless of how much money is actually in your current account, you can charge purchases up to your maximum credit card limit. Somehow signing a piece of paper at the time of purchase doesn’t always feel like you are actually spending money.
This is exactly the mentality that the credit card companies want users to adopt.

Unpaid Balances

By spending more than they can actually afford each month, individuals end up paying very high interest charges each month. Because you are only billed once a month, it is also very easy to forget about purchases you have made using a credit card. You may end up with a very unwelcome surprise at the end of the month once you see just how many purchases you signed for during the past 30 days! Any unpaid balances are charged very high interest rates that can quickly add up. If you continue to pay only the minimum amount, your unpaid balance can often become unmanageable.

Credit Card Fraud

Another common problem with credit cards involves credit card theft. Credit cards can always be stolen meaning that other individuals can start to make charges to your account.

Credit card fraud is becoming an increasing problem due to more sophisticated technology. Nowadays, you don’t even have to lose your physical card for others to make fraudulent purchases. Criminals have devised even more devious methods of obtaining credit card numbers from individuals. This means you may not even realize your card has been compromised until you receive your monthly statement. You need to check every monthly statement very carefully to detect any suspicious charges.

Although credit cards are convenient, they carry very high interest charges. Carrying an unpaid balance for an extended period can get you into financial debt very quickly. You often have a greater temptation to overspend because you don’t need to have money available at the time of purchase. Last but not least, credit card theft is an ever-increasing threat that you need to consider before applying for a card.

Costly Cash Withdrawals

You can use credit cards to take money from an ATM, but cash advances with credit cards are much more expensive than ATM withdrawals with debit cards. The Federal Reserve states that cash advances often incur flat fees equal to a percentage of the amount withdrawn; when you get money from an ATM, you could lose 3 or 4 percent right off the top. In addition, credit card companies often charge higher interest rates on cash advances.

Other Fees

Credit card companies can impose a host of other fees and penalties that can push up the cost of owning a credit card. Some companies charge annual account fees that you have to pay even if you always pay your balances in full each month. Other common fees include late-payment fees, over-the-limit fees and foreign transaction fees.


No credit card company or bank in the world provide its customers credit card not for service but only for profit. So how can you expect credit card facilities useful for consumers?. Many across committed suicides due to over credit card debt's. Some banks even threaten its customer to repay amount. There is such extreme cases since bank earns a lot from its penalties and debt. So be aware of credit cards, its advised to spent from hand. If u have a card just go through the bank credit card policy statement, before doing next purchase.      
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