*We asked readers to send in their opinions on the credit card vs debit card
debate. Here's their take on the advantages and disadvantages of credit and
debit cards and the problems they faced after using their credit cards :*
*Credit Cards can 'earn' you lot of money*
*I* have been using 3 Credit Cards of different Banks with unique benefits
being offered on each Card. The mantra with Credit Cards is to spend only
what you can actually pay before the Due Date in totality. NEVER revolve the
Credit or pay only the Minimum Amount Due, as then the Banks start squeezing
you with interest on interest which is as high as 36% p.a.
Now the benefit with Credit Cards is the Reward Points Program. I have
"earned" as much as Rs. 3500 in 1 year from a certain Credit Card being
offered by a Bank which gives Cash-back as much as 4% on Departmental Stores
Shopping & 2.5% extra Cash Back on Petrol Purchases.
But this has been possible only because I have paid all my Bills on
time & *never
ever paid a single paisa in interest*. My second Card which is Co-branded of
which I have been a member since past 12 years, I might have "earned" as
much as Rs. 8,000-10,000 in Petro Coupons, just by filling Petrol through
this Card. The third Card I only use to buy my Insurance Policies, Renewal
Premium etc. of the same Bank as this Bank gives the facility of Interest
Free EMI's on purchase of its own products.
Thereby I actually earn interest from the Bank by having derived full value
of the Service at purchase, whereas only paying a 12th portion of the
purchase amount, every month.
I actually have a 4th Credit Card also which is Co-branded with a Grocery
Store Chain & offering as much as 5% discount on purchases from its Stores.
Now coming to Debit Cards, which DO NOT offer any free Credit Period or
Rewards on purchases, but make you disciplined in not spending more then
actually what you can pay for.
However I feel Credit Cards are any day much more useful as you can also
Plan your future Payouts by utilizing the Credit Free Periods, since you
would know your Cash Flow status at the due date of payment.
But remember 'DISCIPLINE' is the MAGIC word if you want to "earn" money &
that too with free Credit ranging from 10-50 days instead of paying
interest.
*
--
Sumeet Goel*
*It is heavenly to use credit cards*
*C*redit card, when used very carefully, has all the advantages in the
world. First, a guarantor is needed when any bank or financial institution
is approached for a loan. Next, they will cut a certain part of it and
convert it into shares. Most probably, it is 10% of the loan amount. This is
not the case with credit cards. Swipe it and the payment is made followed by
handing over the goods. No hard cash.
SBI [Get Quote<http://money.rediff.com/money/jsp/quote_process.jsp?query=state
bank of
india>] card offers a Flexi Pay Plan wherein any transaction has to be
reported within 10 days for conversion to Flexi Pay Plan. Although with a
flat rate of interest of around 10% it is still affordable to use credit
cards and Flexi Pay Plan. Further, online shopping sites require Credit
Cards for realisation of payment which is done within a few hours. These
online shopping sites are actually "window shopping" sites where one can get
to know the prices of commodities, rather than asking for them in shops.
I have reversed many a dues and penalties of SBI Card through helpline
numbers. I would get my statements late and would be charged for late
payments. Reminding the Card company of such dubious policies and the RBI
directive to these companies not the charge penalties to customers in case
of late statement delivery, they have accepted requests and reversed any
penalties.
With the increasing amount of credit facility, every 2 - 3 years, and with
the Flexi Pay Plan, it is heavenly to use credit cards, of course, within
ones limits and careful planning.
I, for one, have brought many commodities like laptop, mobile, furniture,
vacuum cleaner, etc. through credit cards.
*
--
Vinay Khedekar*
*Credit cards are silent killers*
*C*redit Cards are silent killers of your hard earned money, once you are
trapped then you turn out to be prestigious slaves for the banks, they enjoy
the benefit out of you with their tricky flashy discounts and offers, where
their calculations could be understood only by the banks.
I had a terrible experience with the SBI Card, though I had dropped the
cheque in one of the SBI branch, Perungudi, Chennai, before the due date, ie
26th of every month, on 28th of the respective month I got a call from the
SBI Card centre stating we have still no received your check for the
respective month.
I said to them please do check it up with the bank where I have dropped it
or with your clearing office. Suddenly the guy who spoke to me through phone
started raising his voice and he was not ready to accept what I said. I
replied back saying him "Please do speak politely with manners with your
customers and do check my past payment history, I have paid by cheques ahead
of time", and suddenly he replied back saying with arroagance "This is the
way we speak". I just kept the phone down.
This event made me to close my SBI Card the next day by paying out the
entire remaining balance. Perhaps I was using this card for the past 2
years. Now I am free with no more credit cards and no more headaches! Never
opt for a Credit Card, its a silent killer!
*
--
P.S. Pramod Kumar*
*Salaried people should not have a credit card*
*A*t the outset, all the bank offering credit card to almost businessman,
self-employed and salaried person and invariably even if you have credit
card with the same bank you will get call from the same bank customer care
department almost everyday.
I feel credit card is useful only for the business man not for any
individual. The salaried person can not afford to have more than one card if
still he wants to have more than one he should definitely burn his finger at
any point of time.
Most of the banks offer you more credit limit by way of inviting to make
more purchases on your card to enable you to increase your debt and
ultimately the holder of the card suffers lot by way of paying more interest
by way of paying minimum amount charges on their purchases.
I really feel if we are a salaried person best thing is to come out of this
entire problem by way of not having credit card.
Ramamurthy Sridhar
*Credit and debit cards can create financial burden...*
*I* am an Accountant living in UK. I personally feel that everyone should
have at least two credit cards. Because I travel a lot and it is
very useful to get things done like paying for your hotel accommodation etc.
But I have arranged a direct debit payment on a monthly
basis for my credit card expenses, so it is not a burden for me at all.
I personally feel that any financial device like cash, credit or debit cards
will create financial burden like debt if not managed properly.
Debit card is a blessing because we can carry it in our purse instead
of cash. If our wallet is ever stolen if its cash then we wont be
able to do anything but if it is cards we will be able to call and cancel
them.
*
--
Mary Vincent*
