Why use a credit card? Should I use a credit card?

In fact, all bank cards you use can be called credit cards, but we usually think of credit cards as cards that can be overdrafted, and the reason why you can overdraft a certain amount of money depends on your Personal credit. A credit card is necessary to meet your necessary needs, but too many credit cards are unnecessary.

Many people in modern times have at least one credit card, because credit cards can be overdrafted, so they can solve your urgent needs when you need them. Of course, some people are accustomed to the lifestyle of overdrafting first and repaying later. , it seems that money is always spent before wages are paid, so an overdraft is needed.

There are also some people who have more than one credit card, and bank staff will constantly come to their door to apply for a card. Of course, there will be some preferential policies when applying for the card, such as giving some free money after applying for the card. Small gifts can be exchanged for gifts after spending a certain amount. On designated dates and designated merchants, there are discounts for using credit cards. There are also certain discounts for watching movies.

But when applying for a card, it is still based on personal needs. Don’t apply for a card you don’t need because of various discounts, because you will have to manage more cards in the future. Overdrafts must be repaid on time, otherwise high interest rates will accrue.

In the past, the credit limit of credit cards was generally between 10,000 and 20,000, but now bank cards have an additional contract loan function, and many online financial institutions also offer many more loan projects. The amount also ranges from tens of thousands to hundreds of thousands. Borrowing money seems to have become easier. No mortgage is required. Everyone can get a loan, but this also requires everyone to have a more rational consumption concept, because sooner or later the borrowed money will also be Have to pay it back.

The advantages and disadvantages of credit cards, use them well and avoid the disadvantages

The emergence of credit cards has broken the debit model of traditional savings cards and brought people into the era of credit consumption. The time value of money is maximized. But at the same time, for some people who do not make good use of the benefits of credit cards, credit cards mean a huge repayment burden and the pressure of interest compounding. What are the specific advantages and disadvantages of credit cards? Let me take stock of it for you.

Benefits of credit card

1. Advance overdraft function. The ability to advance overdraft is arguably the most important benefit of a credit card. When cardholders are short on money or have large capital flows, they can use the advance overdraft function of their credit cards to solve their funding needs. You can choose to swipe your card or withdraw a small amount of cash to meet your temporary needs;

2. Enjoy the convenience of installment payment. When you buy large items for life or work needs, if you are under a lot of financial pressure, you can choose to apply for installment payment through a credit card and pay a small amount of interest to meet your consumption needs;

3. Promotional activities . This is another major benefit of credit cards. Various credit cards generally have their own exclusive discounts and discounts, and some also have special service rights.

Disadvantages of credit cards

1. Blind consumption. People who are addicted to swiping their cards enjoy the pleasant process of swiping their cards and even buy unnecessary things, which greatly increases their financial troubles;

2. Various handling fees and interest. Many banks' credit card cash withdrawals require not only handling fees but also interest, which adds up to a large amount. There are also various fees such as annual credit card fees, which will undoubtedly increase the financial burden;

3. Bring Come to credit issue. If you repay overdue, you will have a bad credit record, which will affect your personal credit report and bring great inconvenience to your life. You may even be added to the bank's blacklist, making life difficult for cardholders.

Generally speaking, the advantages and disadvantages of credit cards are relative. If you make good use of credit cards, you can maximize the benefits of credit cards and earn more money; and if you use credit cards to spend randomly, If you cash out illegally, the final result will inevitably be to become a card slave and even be punished by the law.

What is a credit card overdraft?

Credit card overdraft has two meanings. One is to use a credit card to overdraft for normal consumption or to overdraft cash. An overdraft in this context means that the cardholder can use the credit card to make purchases or withdraw cash without depositing money, which is equivalent to borrowing money from the bank. Another meaning of overdraft is that the amount of credit card consumption exceeds the cardholder's credit limit, which is commonly referred to as "overdraft."

This situation is not encouraged by banks, and some banks will charge over-limit fees to cardholders who max out their credit cards.

Have you ever used a credit card with China Merchants Bank for overdraft in advance? Can you tell me the pros and cons?

Hello

First of all, credit cards are used for overdraft consumption, which is also different from debit cards. The biggest difference

The advantages of credit cards are:

There is an overdraft credit line available for early consumption and unified repayment

You can borrow cash in advance to alleviate urgent needs

Consumption points can be exchanged for exquisite gifts;

The longest interest-free period for consumption is 56 days;

Can be used as a registration card for personal online banking;

In Certain merchants can use it as a discount card;

No need to carry large amounts of cash when traveling

No annual fee for card purchases

As for the disadvantages of credit cards, I personally summarize:< /p>

It is easy for people to have a blind desire to consume and it is difficult to control spending because credit cards are overdrafted for consumption. It is easy for people to feel that things are free for a moment when shopping. It is very convenient to buy what you want.

The risk of card loss is high because most credit cards are signed directly without a consumption password

Thank you

That’s all for the introduction to why credit cards are overdrawn in advance.