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Saturday, March 13, 2010

Save Money Make Money: Episode 10

Concept 10: Another Evil: The Credit Cards

The main evil is "living on debts, living on loans". The interested parties have glamorized it a lot by brainwashing most of the people by advocating that the real way of living life is to start enjoying all the material pleasures from the very first day of your life and for that these interested parties are willing to provide you the loans at vulgarly and obscenely high interest rates.

Credit card system comes very handy, on a day to day or even minute to minute basis, to fulfil your such desires without your possessing any ready cash of your own with you. And if you default to pay back the entire money due on you on the specified date, the credit card companies allow you to carry forward your loans. It is so convenient for you if you are spending more that what you earn and credit card companies are happier still, since they can extract lot more money from you after a few months or few years on that carried forward loan. Ironically, they do not have to do any work to earn that extra money. Just keep adding the interest. And so, you get a shock of your life when the credit card company sends a statement after few months demanding a sum of money that is far higher than your own estimate of what was due on you. The interest rates are unimaginably and more so, unreasonably and illogically high. (I wish that the government in every country could exercise some control on it and put a cap on the highest interest rate that the credit card companies can charge).

Under the existing circumstances, better thing is to use cash to buy things and if you at all use the credit card, keep a track of how much have you bought on credit card in order to keep a control on expenses using the credit card. This way, you will be able to pay back the entire money due on you on month to month basis and you will never waste your money in paying the unnecessary and heavy interest.

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