Actually, I have been using credit cards for more than 20 years, and banks at home and abroad have launched them, so I am relatively experienced. The essence of a credit card is a small loan from a bank. Whether this product brings blessing or disaster to people depends on their own situation and personality. In fact, the logic behind various financial institutions lending you money for consumption is to allow you to consume in advance. However, some people mistakenly regard the advance consumption here as over-consumption and fall into consumption misunderstandings.

There are dangers in using credit cards. They can be roughly divided into three categories of people: One category is those who spend as much as they want while they have a few credit cards in hand, regardless of the consequences. Some people even use POS machines to swipe money repeatedly. , in the end, the credit card overdraft has exceeded his own repayment ability. This usage habit is very dangerous.

The other type is using a credit card to buy luxury goods. You seem to be able to afford it at the time, but later you still cannot afford the purchase, so you may choose to repay it in installments. Although this type of people can remember to pay off their credit cards every month, they will never return to their excessive consumption. In the long run, they will only owe more and more debts and have less and less money in their hands. If you have this kind of spending habit, it is best to cancel all your credit cards and develop the habit of saving money, which will be good for your future.

There is another type of people who do not have a high income, have poor self-control, and often forget to repay their loans. For them, such early consumption may be more dangerous. Once they consume too much and fail to repay in time, they will accrue very high interest. Once the repayment is interrupted, it will also affect their personal credit, and the consequences will be more serious. trouble. Therefore, credit card consumption overdraft is also detrimental to this group of people.

Of course, as a small loan product of a bank, credit card is not a problem for people with strong self-control. Because he can repay the loan in time, it is convenient to use and can repay the short-term overdraft in time without paying additional fees. Objectively, he is getting a small advantage from the bank! Including myself, I know at least a dozen friends who have never had an overdue credit card. And it can be repaid every month.

Another way to use credit cards is to use cash advances. In fact, this hidden cost is very high. Not only is there a handling fee of about 1% when withdrawing money, but there is also overdraft interest that needs to be repaid immediately, with a daily interest rate of 0.050% (daily interest rate of 0.05%) and an annualized interest rate of 18.250%. If the overdraft amount is too large, your monthly salary may only be enough to pay interest and handling fees. This will greatly affect your life. It is best not to do this unless it is most necessary!

We know that various conditions must be met to apply for a credit card. Many people cannot apply for a credit card, and even if some people apply, the limit is not high. Therefore, it is good if you have a credit card, but you must use it correctly - first, repay on time, second, consume only within your own ability, try not to repay in installments, and do not overspend. Third, if you can avoid overdrafting cash, don’t overdraft.