Finance company NBFCs (co-branded card with some bank) or Banks offer credit cards to almost everyone. Companies want you to be associated with them in some way or the other. Companies offer 0% interest credit for almost 50 days (if used wisely) which is one of the strongest tools for an entrepreneur but on the other hand if due to any reasons, the customers miss paying before the due date then it impacts the customer negatively. It may force the customer to lose their hard-earned money. It is because of the interest they charge on the outstanding amount which varies from 36% to 48% pa. Due to heavy interest, it becomes very tough for the client to overcome this outstanding, though, finance companies like such customers more (because they are a revenue source for the company) than the customers who pay on time. In addition, in case of a missed payment, their collection department starts making calls multiple times every day which may hamper the peace of mind & the daily schedule of the customer.
So, my advice to all the young earners is: Take as many credit cards as you want but use this finance tool for your benefit & pay the full outstanding before the due date. Use credit cards wisely.
Vikas Chandra Sharma, Assistant Professor, Unitedworld School of Business (UWSB)
Disclaimer: The opinions / views expressed in this article are solely of the author in his / her individual capacity. They do not purport to reflect the opinions and/or views of the College and/or University or its members.