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Credit card is one of the revolution in the financial services that was first known in the 1920s. Credit cards are one of source for banks to get income other than conventional loan interest and for the holders of the card to get the ease of using available limits for various purposes.
Nowadays, credit cards have many functions other than as a medium of payment. However, many people misinterpret credit cards as magic cards that have unlimited money. In fact, the true is credit card is a form of debt that must be paid by the holder. If not, then problems will arise later.
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Credit Card (source: google.com)
What are the Benefits of Credit Cards?
As mentioned above, the use of credit cards serves to help us when we need to pay off something in an emergency and when we don’t have cash. Usually this often happens in some cases, for example when paying hospital fees, labor costs and so forth.
Usually a credit card will provide a grace period of up to one month to pay it off. Credit cards are also useful when shopping online.
Most merchants who sell their products in popular marketplaces both in Indonesia and abroad mostly recommend making credit card payments. This is because of several benefits, including safer and the money received quickly received by traders than having to wait from a marketplace provider. The impact, of course, its own pride for you to have the product or item that you want.
Another benefit is that credit card lenders often hold credit card promos almost every month. There are various discounts at each particular merchant, or the most popular is a holiday promo with many amenities, ranging from discounted airplane ticket prices, to hotel discounts. The promos offered are so interesting, but try not to be too tempted by these promos, if they are not needed.
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Credit Card’s Bad Impact?
The first thing to remember is that credit cards are debt cards, not cards that provide unlimited funds. Many people do not realize this because they are too hype in using a credit card that they forget to pay it later and spend all available limits. In fact, all of those spending has to be paid later.
The interest applied seems to be quite small, but when viewed per year, the interest is quite large. Bank Indonesia has determined that the maximum credit card interest is 2.25% per month, which means 28% a year! Don’t forget also the concept of multiple interest, where the outstanding bill will be charged interest in the next bill following interest from the previous bill.
Another concern is transaction security. Always pay attention to the EDC machine that used to make a transaction whether a scammer is inserted or not. Most credit cards today use chips, so the risk of double swipe, aka being debited twice becomes small, except when the network is not good. To prevent this, you should wait for the confirmation to fail or we receive it before continuing the next transaction.
Transaction security on the internet is also worth watching out for. The number of malware that can read our transaction data makes us vulnerable to attack and use our credit card data to be misused. Always be careful when shopping or transacting online and make sure that the address is at least https.
Here are some tips for using a credit card:
- Always pay credit card bills on time. This avoids the possibility of interest charged and, even worse, multiple interest.
- Pay the bill in full. Or at least, above the minimum payment amount which is 10% of the total bill. Many cases where customers are trapped in credit card debt because they only pay a minimum bill.
- Use only in an emergency. Credit cards should be used as a last resort. Credit card interest is quite high, around 2.25% per month can be a scary thing if you continue to let it go.
- Learn about using credit cards. Every month, we get invoices sent to us in the form of letters or emails. By looking at these bills, we can find out whether there are recurring bills, or there is an expenditure that is not actually needed.
- Be careful when making transactions online. Malware and hackers always try to steal our personal data on the internet. Clear the cache after making a transaction with a credit card and also change the password if needed.
- Also be careful when making transactions using EDC or ATM. Make sure there is no scammer tool that can read data (if you are still swiping credit cards for transactions) and make sure the internet is good. Multiple transaction events occur if the internet network is not good, so we should wait whether the transaction is successful or failed from the notification sent to our cellphone or email.