In previous times, cash was the only mode of payment used by people. There was no online payments method available at those times.
With the advancement in technology, there are many online methods to make payments, and it has become possible for people to make digital purchases.
The new payments technology
Online payments are the new way to purchase things. There are many methods of online payments such as credit cards, debit cards etc. Credit cards have taken the market through a transformation and have opened a lot of new opportunities.
These cards, also known as plastic money, have single-handedly helped the market go into a boom stage.
With the pandemic, the use of credit cards has been increasing day by day. These plastic money methods have become the need of the hour and are gaining the spotlight. Credit cards are growing stronger, but there are many misconceptions relating to these financial products.
Many people do not prefer credit cards but borrow Christmas loans on benefits to fund their expenses. It is advisable to make use of credit cards instead of loan borrowing.
Misconceptions about credit card
Interest rate is charged from Day 1 of your purchase
Whenever we make a payment from a credit card, it is commonly believed that the interest rate starts from day one. Various banks are offering you credit cards and various benefits with them.
The most common notion about trade cards is that the interest rate is charged from day one of the purchase. On the contrary, the interest rate is not charged on your purchases. There is a specific time period of your billing cycle, and the interest rate is charged according to that billing cycle.
The period that goes without the interest-rate Charge is known as an interest-free grace period. Hence, if you use your credit card and pay your bill before the due date with no interest, we charge on your purchases.
The interest rate only starts after the due date. If you make any kind of purchase with your credit card and do not make any Cash withdrawals, you are not charging any interest rate.
Credit cards engage you in impulsive spending patterns
Another myth that revolves around credit card payment is impulsive spending. Many people believe that having a credit card will indulge in impulsive spending and will make you spend a lot of money.
You may buy a lot of goods and services that you do not require, but why because of the credit cards in your hands. The truth behind this is that credit cards do not make you involve in impulsive spending.
Impulsive spending is a consequence of bad financial habits and cannot be altered by any means of money. The blame cannot be made on credit cards but bad financial habits.
For example, there are many financial benefits to individuals on credit cards. They do not indulge in impulsive spending and use their credit cards within limits.
Also, if you feel that red cards indulge you in impulsive spending, you can make the budget that helps you to calculate your total spending considering all your spending habits.
More than one credit card puts you in financial trouble
Many people feel that you just need one credit card to support your spending. Having one credit card will help the buyer purchase within limits and improve their spending habits.
On the contrary, more credit cards offer more benefits. As mentioned above, the spending habits define your buying and the money that you spend. In the UK, many people have bad spending habits and also borrow 15 min loans.
These loans definitely give you money to spend but also put you under a burden and trap you in debt. On the contrary, credit cards are beneficial than loans. Credit cards offer you various offers and schemes that offer you specialized promotions.
A single credit card may not offer you the right schemes and benefits for you and me not to have collaborated with multiple brands and subscribers. Having a large number of credit cards helps you gain access to various discounts and schemes provided by various service providers.
If you have more than one record, it increases your horizon of spending and gives you access to a wide range of products and services and various brands and retailers.
Many people have various notions about credit cards that should be clarified. On the contrary to the beliefs, credit cards offer you great benefits and help you achieve financial freedom.
Many credit cards provide you with the leverage to imbibe healthy spending habits. You should use your credit cards with proper planning and in an informed manner.