Credit card: A means of convenience or a debt trap? How useful or how dangerous?

New Delhi. In today’s digital era, credit cards have become an important part of everyday needs. Bill payment, shopping or traveling – payment has become easy with its help everywhere. The hassle of carrying cash has ended and online shopping has also become more secure. If the card is lost or stolen, the loss can be avoided by getting it blocked immediately by the bank.

Increased benefits from rewards, cashback and discounts
Credit cards not only provide convenience but also make every expenditure profitable. From buying groceries to paying electricity bills, many card companies offer reward points and cashback. These points can later be converted into gift vouchers or discounts. Also, it is common to get special discounts on partner brands, which makes it possible to save on everyday expenses as well.

Responsible use improves credit score
Paying credit card bills on time strengthens a person’s credit score, which helps in getting loans or other financial facilities in future. Credit card also acts as an emergency fund in case of sudden needs. However, caution is necessary because late payment or carelessness can damage the credit score.

Danger of high interest rates and hidden charges
The biggest challenge of credit cards is its high interest rates. If payment is not made on time, the interest on the outstanding amount increases rapidly and the debt starts increasing. Additionally, many cards also have hidden charges like joining fee, annual fee, processing charge etc. Due to repeated swiping, people often end up spending more than their income, which can increase financial pressure. If credit card is used wisely, it becomes a financial facility, but if careless, this card can also increase the debt burden. Therefore, it is very important to know the terms, interest rates and fees before using it.