The utilization of credit cards has greatly risen in the present day. People desire credit cards because of the different promotions available on them during sales. Furthermore, reward points can be accumulated and exchanged for shopping rewards. Certain credit cards offer the option to exchange reward points for cash.
CIBIL score may worsen
Nevertheless, a significant inquiry emerges: is it advisable for all individuals to obtain a credit card? The response is negative. Their CIBIL score may worsen if they obtain a credit card. Let’s determine who should avoid using credit cards. Having trouble managing spending and frequently overspending without consideration may be exacerbated by obtaining a credit card, leading to a worsening financial situation. They might need to pay back loans with steep interest rates.
What if someone is currently in debt?
Failure to pay the credit card balance promptly can lead to an escalation in interest and fees. If someone is currently in debt, they should steer clear of using credit cards. This debt may arise from personal loans, student loans, car loans, or mortgage loans. Acquiring a credit card may lead to higher levels of debt for these individuals, exacerbating their financial condition. Getting a credit card without budgeting and planning expenses is equivalent to shooting oneself in the foot.
These individuals struggle to control their spending using a credit card and eventually fail to make timely payments. Using a credit card can further increase the financial vulnerability of individuals with low incomes who have difficulty covering their regular expenses. Various security measures are in place when using a credit card, including fraud protection, EMI choices, and knowledge of interest rates.
Without grasping these financial security measures, individuals might end up making an incorrect choice regarding credit cards. People like that should refrain from obtaining a credit card. Financial discipline is necessary for using a credit card properly.