Case Study #4 — Why I Don’t Own a Credit Card?

by Vinaya HS on July 2, 2009

in Finance

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I was curious to know why a friend of mine didn’t own a credit card — especially in this day and age. My friend’s response:

Haasige iddashtu kaalu chaachu (idiom for: I don’t want to spend money that’s not mine to begin with). Add to that the hassles of remembering payment due dates, amounts, etc. Throw in the risk of physically losing/misplacing the credit card (I don’t even want to talk about the virtual aspect). It’s very easy to fall into a strangling spiral of spending money that’s not yours. I’ve seen people turn into compulsive spenders just to recover the annual fee and to utilize offers; seen people shift to another bank that clears your existing credit and gives you even more (read: balance transfers); seen people exhaust the limit on one card and simply move on to the next one in their wallet. They aren’t a happy bunch today. When you can keep things simple — and yourself happy — with your hard-earned cash, why would you want to get into the mess of credit cards?

I do confess that I have been attracted to cash-back and point-redemption offers, but one look at the fine print and…I know that it’s not for me. Of course, there are certain drawbacks to not having a credit card; but when you own your choices you also own their consequences.

What do you think?

Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

{ 4 comments… read them below or add one }

Anoop July 2, 2009 at 10:51 AM

The final statement is very true!, I have Visa/Master debt card, that way I only spend the money in my savings bank account & its accessible all over the world.

Girish July 4, 2009 at 8:53 PM

What is in your account is only your money, which you need to think
and spend…
Money in credit card is money which is spent with full relish,
but repaid back gaining big losses and with sorrow….

Vinaya HS July 6, 2009 at 9:31 PM

Nice way of putting it Girish.

Ramesh Kumar KL September 12, 2009 at 1:51 AM

not all loss money in using credit cards, i have been using credit cards since 8 years and believe me i have not paid a single rupee extra than what i have sent. as of now i have 18 cards and i have made more Rs 70,000/- using wright card for wright spends.
one should know there credit cards and the offers given by them, also they should keep track on bill dates and due dates. be punctual in drooping the cheque or make on line payment 2 days before due date. if there is any finance crunches then opt for 3 months balance transfer rather than paying minimum amount due.
most important, don’t over spend since you have the credit card with good limit. remember that its you who has to pay that bills on the due date, if not at the time of spending.
point to consider,

Do not carry all the cards in your wallet, carry the 2 or 3 based on offers and bill date.

Know your bill dates and due date, know the cards that you have used in that month (best way to remember is to write the cheque as soon as you receive the bill and drop it a week before the due date.

use the cards based on the offers, like kotak trump cards fives 10% cash back on all movie tickets and food joints. standardchartered give 5% cash back on all phone bills, citibank gives 5X rewards on weekends. there are many such cards with good offers.

Keep regular contact with customer case and cards websites to know your expenses, payments and offers. do not relay on hardcopy bills.

Use your card where ever its required, like paying premiums, do not agree to pay the 2% service charges. never pay joining fee and annual fee for any cards.

Take time to check the monthly bill and tally it with the spends.


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