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All of us know or knew at least one friend who survives/survived on credit cards for years of their lives. It is a silent epidemic in India and usually affects those who have poor saving habits and have no problems living a life full of debt. In fact, the use of credit cards leads to debt due to steep interest rates. And debt leads to the use of credit cards once again. It is a vicious cycle that you cannot escape easily. Those who get stuck, cannot get out for several years.

What’s more, numerous studies internationally have found that shoppers spend up to 100% more when they use a credit card to pay instead of cash or debit cards. It’s basic psychology – instead of spending one’s money then and there, credit cards give shoppers the impression that since they can pay later, it’s okay to buy that totally unnecessary bean bag or mobile stand or selfie stick. With credit cards, there are no risks of over-spending.

Credit-card-issuing banks realize this and make use of this attraction to urge people to buy credit cards. You would have noticed that you get several spam calls a week from banks requesting you to buy their credit cards. Have you ever pondered why these calls come only for credit cards and not debit cards? There are so many credit card defaulters who keep paying heavy interest in the following months that banks find it profitable enough to employ teams of people, train them for a month, and have them harass you day and night with sales calls.

It is high time you stopped funding the credit card industry!

So, what are my alternatives?

Credit cards began gaining popularity in congruence with the popularity of eCommerce in India (credit card usage went from INR 8,958 crore in FY 2012 to INR 33,619.6 crore in FY 2017, a whopping 275% rise). However, debit cards give you the same convenience without any of the charges and conditions attached. Credit cards have attractive offers, but so do mobile wallets like Paytm and PhonePe. Today, with the Government pushing for a less-cash economy, there is no reason whatsoever to continue using credit cards.

With the widespread use and support from banks and vendors that apps such as BHIM are getting, you have all the flexibility of credit cards and far more for zero hidden charges and right from the convenience of your phone screen.

Also Read: Top 5 Finance Apps Available in India for Free That You Need to Install Now

Yes, we realize what we are asking you to do by weaning off credit card usage. We are effectively asking you to bring in discipline and stick to a budget every month. This could be tough for some people who have been using credit cards for years; however, financial discipline is the first step to a financially secure tomorrow. Savings and careful investments for a brighter, debt-free tomorrow is financial wisdom.


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