What should we know about Credit Card and Debts?

Having worked at the Bank handling products like Credit Cards, Personal Loans and Bank Accounts, I felt the necessity for writing this Article.Though one can Profit from Credit Cards and use credit to improve financial life many fail to use credit cards wisely. In my Career in Banking, I have seen several Customers and friends of mine who are struggling to pay off their Credit Card and Loan Debts. I have also seen some who spend money on Credit Card like water without even thinking if they would be able to pay it back. At Restaurants and Malls you can see guys and girls their flaunting Credit Cards. Spending on Cards become an addiction if one is not very careful. The Question before you start using the Card is you really aware of the pros and cons of the product? There are several things a Credit Card Holder or someone who wants to have a credit card need to know.

• The first thing we should realize is that Credit Card is only an unsecured Loan given to you by the Bank and that you should pay back your Card Dues. All is well as long as you pay your dues in time and not accumulate dues to the point that you default your payments.
• Always read everything you get along with the welcome kit including usage of the Card, Safety instructions, payment procedures, interest and charges etc.
• As said earlier the Credit Card Cash is not your own money and attracts a Credit Card Interest which can be as high as 48% per Yearly.
• Credit Cards can be misused, so always opt for a Photo Card for better safety. Also as soon as you receive it sign on the signature panel of your Card. Keep your card in a safe place.
• There are a variety of Credit Cards available in the Market. Some cards promises rewards on Air travel, some on Oil, some on shopping and so on. We need to know the benefits to use it to our advantage. You need to choose your Card based on your usage.
• Always keep track of your Payment Due Dates and pay before the date by check for easy tracking. By paying the entire dues in time you save on interest. If the full payment is not made, interest is charged from the date on which the transaction is made.
• Use the Card for Purchases only. Remember that the transaction charges and interest on Cash withdrawals are high and use the Card for cash withdrawals only if it is absolutely necessary.
• Using Cards for tracking expenses or as emergency cash is okay. But never ever spend more than you can afford to pay back or without an action plan as to how to pay back the amount.
• Don’t be too excited when you hear the ‘FREE’ word. The Banks Call Center and Direct Selling Agents Executives may call and offer you a Free Credit Cards or Pre Approved Loans, but these are only marketing tactics. After all, they are paid to get you into debt. Ultimately your Card is your responsibility. Don’t go for a Card unless you are willing to take the responsibility yourself. Some Cards may not have a membership fees in the first year, but may have it in the coming years. Understand the deal properly before getting into it. Isn’t there a saying there is no free meal?
• Never ever sign on Blank Application Forms. If possible personally fill it or get it filled by the executive before signing. If you do not want to opt for Insurance or any other offer associated with the Card strike out the Option. Also see to it that your Photograph is pasted on the form before signing it.
• If you see any charges on your Card statement which you think should not have been there immediately call the help line numbers for Clarification and reversal if any. If you are not responding you are indirectly agreeing on the accuracy of the statement.
• Do not throw your charge slips away until you have received the Card Statement and cross checked your expenses on Card. Also keep your Card statements for record and future reference.
• Once you have a bad credit or become a defaulter, you would be blacklisted by all Banks and it would be very difficult for you to get another Card or Loan when you desperately need it.
• The People who give unseccured loans are not fools and they have ways and means to get back their money from you with interest if you default. Most of the times they can trace you even if you change residences to avoid being caught.
• There have been cases when one have been forced to withdraw money from ATM at Gunpoint, during such an incident one should type the pin number by reversing it. Money would still come out but at the same time the police would be notified.

Is'nt there a saying ' Money saved is money earned.' So as far as possible do not spend beyond your limits and if possible spend on Debit Card instead of Credit Card. Feel free to add anything which I may have avoided through comments.