Stage 1 : A Personal Account of Manipulation and Harrowing Consequences with Credit Cards.
In a chilling story shared by my father, I discovered the nightmarish experience he endured with a credit card and the manipulation he faced from his own brother. It was a distressing account of how his brother forced him to get a credit card, only to exploit it for personal gain. The consequences were severe, and the relentless actions of debt collectors left a lasting impact on our family, profoundly influencing my perspective on credit cards.
As my father recounted the troubling events, I couldn’t help but feel deep empathy and a strong desire to protect myself from a similar situation. Hearing about the mounting debts, the financial burden, and the relentless harassment he faced, I made a firm commitment to never venture down that dangerous path. This cautionary tale served as a powerful reminder of the potential risks associated with credit cards, motivating me to approach my own financial journey with utmost caution and mindfulness.
Stage 2 : Credit Cards turned out to be Essential Partners in Early Travel Adventures
Paragraph: When I first embarked on my journeys abroad, I quickly realized that credit cards played a vital role in making travel arrangements. Even a simple international call from the airport to let my parents know I had arrived safely required a credit card. As online booking platforms gained popularity and digital payments became more common, having a credit card became a requirement for securing flights, accommodations, and other travel services.
In those early days of traveling internationally, credit cards became indispensable companions. They made transactions seamless and provided a sense of security during uncertain trips. Credit cards opened doors to new experiences, offering convenience and opportunities that were hard to ignore. Despite their downsides, credit cards were essential tools in navigating the initial stages of my travel adventures.
But I still did not get one for myself; I lived by borrowing others’ cards and repaying them immediately with cash.
Stage 3 : Eye-Opening Conversations: Unveiling the Allure of Credit Cards during a Memorable Trip
During a memorable trip to Osaka with friends, the topic of credit cards came up one night, leading to eye-opening conversations. A friend excitedly shared how lucrative the point system of his credit card was, boasting about the expensive items he had obtained for free, such as a passport holder, a leather travel bag, and even Ray-Ban glasses. Another friend chimed in, explaining how he strategically managed two credit cards, balancing their billing cycles to always have a surplus of money available without any cost. Lastly, another friend recounted a crucial moment when his mother fell ill, leaving him in a desperate situation. With no immediate funds, the hospitals were hesitant to provide further care. Fortunately, he had a credit card that came to his rescue, allowing him to promptly cover the expenses. Hearing these stories compelled me to delve deeper into the world of credit cards, igniting a curiosity about owning one for myself.
Stage 4 : My Credit Card Journey: From Research to Frustration and Lessons Learned.
After consulting friends and exploring credit cards from various banks, I stumbled upon an enticing moneyback card from HDFC. With its appealing features like zero annual maintenance, lifetime free card, and earning 1 point for every 100 spent, I decided to order one online. Soon, my phone buzzed with calls from various banks, offering tempting deals. However, staying true to my research, I stuck to my initial choice. From that point forward, my focus shifted to understanding the intricacies of credit card statements, deciphering billing cycles, total due amounts, and minimum payments. By ensuring timely payments, I successfully avoided penalties and maintained a spotless record.
As a thrifty spender, I discovered that the points earned from my HDFC card were not as lucrative as expected. Each point seemed devalued, equating to approximately 0.2Rs instead of the promised 1Rs. Furthermore, redemption was only possible once the points reached a minimum of 5000. Dissatisfied, I felt the need to master credit card usage further and started exploring other cards with better rewards. A friend recommended the Standard Chartered card, boasting a generous points system. However, I soon realized their billing practices were flawed, putting me at a disadvantage. Though I accumulated a significant number of points, rectifying discrepancies meant spending hours on customer care calls. The frustration grew, leading me to discontinue the Standard Chartered card. To my dismay, even eight years after cancellation, it still appears on my CIBIL report, indicating a small outstanding due that I have no way of rectifying. Such is the lingering pain I experience from this ordeal.
Stage 5 : Lessons Learned: The Turbulent Journey of Credit Card Ownership
After my wedding, I embarked on my honeymoon in Sikkim, only to be bombarded with incessant calls informing me that I had exceeded my credit card cycle and had outstanding dues. The callers were not only persistent but also incredibly rude. Despite having sufficient funds in my bank account to repay the dues, limited internet access prevented me from making the payment until I returned to Bangalore. Throughout my trip, these relentless phone calls tormented me. Upon my return, I discovered a hefty interest charge imposed on me, prompting me to settle the outstanding amount immediately. It was a relief to clear the debt, but this experience left me questioning the true value of owning a credit card.
The haunting question lingered: Was owning a credit card really worth it? Frustrated by the ordeal, I made the decision to stop using my credit card except for emergencies, as it had no annual fee attached. The incident served as a wake-up call, reminding me of the potential pitfalls and challenges that come with credit card ownership. While credit cards offer convenience and financial flexibility, the harsh reality of unexpected situations and the ruthless tactics of some creditors made me question the overall benefit of relying on them.
I thought I was smart but they over smarted me !!!
Stage 6 : From Credit Card Woes to UPI: The Quest for Simplicity and Fair Deals
After discontinuing the use of credit cards, I encountered an awkward situation while shopping on Amazon. Without an Amazon Pay credit card, I was subjected to a 5% premium on purchases. It felt unfair, as they were inflating the prices to accommodate offers, leaving non-credit card users at a disadvantage. Determined to secure better deals, I decided to apply for an Amazon Pay ICICI credit card, making sure to repay the billed amount instantly, keeping it at 0 INR.
However, to my surprise, when I purchased similar products from local shops and nearby supermarkets, they offered direct discounts on the maximum retail price (MRP). In some cases, these discounts were equal to or even greater than the 5% discount I obtained on Amazon using the Amazon Pay card!
This eye-opening realization led me to bid farewell to credit cards altogether, embracing the simplicity and transparency of UPI (Unified Payments Interface). With UPI, I found a more straightforward payment method that allowed for seamless transactions without the burden of credit card woes. This transition not only freed me from the uncertainties and frustrations associated with credit cards but also presented an opportunity to support local businesses while enjoying fair deals.
Conclusion.
The credit card industry often lures individuals into becoming customers, but once caught in their trap, it’s easy to develop spending habits that lead to debt, jeopardizing financial independence and future retirement savings. While credit cards offer convenience and perks, they can also entice users to overspend and accumulate debt, hindering long-term financial stability. It’s crucial to approach credit card usage with caution, understanding the potential risks and maintaining a disciplined approach to avoid falling into a cycle of debt that could hinder one’s financial goals and retirement plans.
Some Food for Thoughts.
- The average number of credit cards per person in the U.S. is 3.8
- Studies show that shoppers with credit cards are willing to spend more on items, check out with bigger baskets, and focus on and remember more product benefits rather than costs.
- Annual interest rates on credit cards may range between 30% and 45%.
- A November 2022 LendingTree survey found that just 35% of cardholders say they always pay their credit card balance in full every month, while 65% say they carry a balance at least some of the time.
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Disclaimer: This blog post is intended for informational purposes only and should not be considered as financial advice. Always conduct thorough research and consult with a qualified financial professional before making investment decision.