In India, we have more than 60 credit card providers from government or private banks, financial services companies e.g. HDFC, ICICI, Axis, HSBC, American Express, SBI, Induslnd, Citi, Jet Airways, Kotak, Emirates etc. They all come with different plans and perks. Some say a credit card is good and some say it’s bad.
Here in this article, we are giving you basic information about credit card services and we will also see the advantages and disadvantages of credit cards. We have written this article in essay format, but you can use this information for writing a speech too. If you understand the overall topic then you make a good practice content for paragraph writing too.
Essay in Credit Card – Advantages and Disadvantages
Every now and then we receive phone calls, SMSes, Emails with Credit card offers, do you ever thought why banks advertise their credit services so rigorously? They try to make it look like free money, and that’s the trap. A common person (financially illiterate) like us falls into this trap. With easy credit, you spend more than you earn; these facilities of credit card entice us to get one. Credit card system is not bad, it’s we who get addicted to it and misuse it. And on top of it, banks take advantage of our behavior. So, do credit cards have more advantages than disadvantages? The answer is it’s both, it is good also and it is bad too.
Advantages of Credit Card
The biggest point in favor of credit cards is the convenience, you can borrow money instantly within the approved limit. You can use this money in emergency situations like personal or medical emergencies. You can buy expensive items and then pay it on monthly basis with interest. These credit lending companies offer great deals/perks to join like discounts on shopping, air travel, cash-backs, vouchers, membership points, small electronic appliances like headphones etc and some offers gift vouchers and free air miles too. One can take advantage of these offers.
When you buy something from online shopping/e-commerce websites or app you get EMI options if you have a credit card. When you make payment with credit card for various bill payments, mobile recharges etc you can enjoy the cash-backs or discounts.
International credit cards with travel package are good for frequent flyers and people who are on international tour or visiting other countries. Citi credit card is the best option for in such scenarios.
If you use a Credit card wisely, and pay is installments on time then it creates a good credit history (CIBIL SCORE), which helps you to get another loan with little more ease. Your credit history can even help your family to get loans.
Note: 750 to 900 hundred CIBIL Score is excellent and 650 to 750 considered as good. You can check your score at BankBazaar, CreditMantri, PaisaBazaar or cibil.com etc.
A lot of credit card also offers insurance benefits like theft insurance, travel insurance etc. which can be useful when your credit card is stolen.
Disadvantages of Credit Card
We saw all great offers and convenience a credit card offers but some times it’s not all that rosy. Almost all credit card services have complicated agreements which common man cannot understand or sometimes ignores. Later it shows up higher hidden interests or some hidden fees too.
When one has a credit card they tend to spend more than they need. It tempts us to buy more wants than the needs, and this is the trap. If we keep spending the credit on not so important things in life and don’t pay it back on time then the interest piles up. Some people become bankrupt too.
Credit card information is the most vulnerable data over the internet. When we pay something online with a credit card most of the time they save the details on their websites (that small tick, gives them permission to do so). Hackers and cyber criminals make fake phone calls, lottery emails from Nigeria like scam are there to get your credit card information. A lot of people for prey to this. Once you give this data to someone with your permission credit card companies cannot help you to retrieve money back. It is the most look after data for hackers if they get access to your credit card information they can take advantage of it. If hackers or thieves or any other person for that matter made a valid transaction then banks don’t give back this money even it was not you. In such cases, you must report the lost credit card or malicious transactions immediately to near bank branch office or by call customer support.
RBI made it compulsory to have two phase authentication for all online transactions, meaning you must get an OTP (One Time Password) to complete the transaction. But some recurring credit card payment does happen without OTP. This is a big threat to the privacy of your data.
Like any other invention, solutions, credit cards also have their own advantages and disadvantages. It does bring convenience and increases our spending power but some times we get trapped in this and spend more than we can pay back. If we use credit cards wisely it is good or else it can make you bankrupt.
Tips for Essay and Speech
- As this a pros and cons, good and bad type of essay, you must explain both sides equally and then make a conclusion.
- In an essay or a speech, you can take one side of the debate or even say it is good and bad both, it’s up to your understanding and experience of the topic.
- You can write an essay in different formats, this topic falls into an expository essay format.
Before writing a speech think of what is your opinion on the topic and they only start preparing for the speech script.