What are the risks of applying for a credit card?
The biggest risk in applying for a credit card is the risk of borrowing. In fact, there is also a risk to the security of personal funds.
Now is a credit society. Many people have their own credit cards, and some people even have multiple credit cards. Credit cards can indeed facilitate our daily lives and provide stable cash flow when we are in short supply. But for most users, many users do not have good habits of using credit cards correctly. Some people even frequently overdraw their credit cards, or even maliciously overdue their credit cards.
1. The first risk is lending risk.
This loan risk mainly refers to the overdraft situation of credit cards. For some young people, some young people’s consumption habits are too advanced and they often overdraft their credit cards. The income of young people is generally not that high. Some people cannot repay the loan after borrowing a credit card. At this time, they will be overdue. Overdue credit card is a very serious credit default, which will not only affect a person's personal credit score, but in serious cases, it may even make a person bear legal liability.
2. The second risk is the risk of personal financial security.
Because now is the Internet era, many people use online payment to purchase goods. Some people may leak their personal information online. Once this happens, the person's credit card is no longer safe. At this time, it is very easy to risk the security of personal funds. In general, this type of risk can be avoided proactively, and it is best for us to develop correct Internet habits.
3. Credit cards will also have many benefits.
As I said above, in addition to the risks of credit cards, credit cards can actually provide everyone with stable cash flow. Many credit cards have an interest-free period. As long as the user repays the balance during the interest-free period, you can directly interpret this period as cash flow during the window period without paying any interest.
Finally, although there are certain risks in applying for and using credit cards, I think personal operating habits will play a more important role.
Why can’t I lend my credit card to others? Do you know these risks?
In real life, people often lend their credit cards to others. They originally had good intentions and wanted to help others tide over difficulties, but in the end, they turned themselves into strangers. The two parties have a serious dispute due to the credit card, so it is better not to borrow the credit card easily. As for why credit cards cannot be lent to others, it will become clear after reading the risks introduced.
Why can’t I lend my credit card to others?
Under normal circumstances, credit cards can only be used by the person who applies for the card. However, many people borrow money from relatives and friends. Although they have no money but have money in the credit card, they will inevitably borrow the credit card. Those who plan to do this are advised to consider whether they can bear these risks before making a decision.
1. Risk of fraudulent use: Although most banks can provide card loss protection services, it is only limited to the situation where the card holder himself uses the card to be fraudulently used. And if the credit card is stolen after being lent to others, the bank will not be responsible. Unless the cardholder can get the borrower to repay, he will have to pay it out of his own pocket.
2. Credit risk: Cardholders can generally repay on time when using the card themselves, but there is no guarantee that the credit card will be lent to others. Borrowers may not always remember the repayment time. Once they fail to repay on time or are unwilling to repay, it will affect the cardholder's credit score and make it difficult to get a loan to buy a house or a car in the future.
3. Default risk: If the borrower fails to repay within the stipulated time after using the card, causing the credit card to become overdue, the cardholder will bear the risk of default. On the one hand, the bank will take various means to collect money. On the one hand, you have to pay high overdue fees, including liquidated damages, penalty interest, etc.
4. Criminal risk: Many credit cards have risen from civil risks to criminal risks. For example, if the borrower has malicious overdraft behavior when using the credit card, and does not repay the loan for a long time after swiping the card, the principal owed will reach 50,000, the cardholder himself may be charged with credit card crimes by the bank, and may be sentenced even if he repays the loan.
5. Freezing risk: Lending your credit card to others may make you unable to use the credit card again. You must know that the bank will monitor the credit card usage behavior. If the borrower uses the credit card, Illegal cash withdrawals are detected by the bank, and if the circumstances are serious, the credit card will be frozen.
The above is the relevant introduction to "Why you can't lend your credit card to others". In short, borrowing a credit card is very risky, so it is recommended to use your own card.
What does it mean that there is transaction risk in a credit card?
Generally, if there is a transaction risk in a credit card, it means that your card has been risk controlled by the bank. Credit card transaction risks are generally caused by the following reasons: account risks and credit card merchant risks. Accounts are at risk: For frequent cross-regional transactions, sudden large-value transactions, or sudden overseas purchases, banks will send text messages to cardholders to remind them of transaction risks. Some banks will also directly call cardholders to confirm whether they are swiping the card for themselves.
Benefits of applying for a credit card:
(1) Solving the problem of insufficient funds.
(2) Financial investment can be made. Credit cards have an interest-free period. You can use the interest-free period to invest funds in financial management. The interest-free period can be up to fifty or sixty days. Financial investment in so many days You can make a small amount of money
(3) You can get discounts on living expenses. Banks will launch various preferential activities for credit cards, especially on shopping, eating, drinking and having fun, so you apply for a credit card If so, it is sometimes more cost-effective to pay with a credit card than with cash or other methods.
(4) Conducive to loans. Basically, everyone has the need to buy a house or a car, so they often need loans. If you don't have a credit card, your personal credit is not easy to prove, and it is very difficult to get a loan. Once you have a credit card, you can improve your personal credit through reasonable use of the card, which will be a big help for loans.
Risks of applying for a credit card:
(1) Excessive overdraft and irrational consumption. Because credit cards allow overdraft for consumption, many people may not know how to exercise restraint when using credit cards, eventually leading to overdrafts on their credit cards. This will have a very bad impact on one's credit, and the gain outweighs the loss.
(2) Generate high interest. If your credit card is not used properly, once it is overdue, it will incur overdue interest, late payment fees and other fees, and even affect your personal credit record.
Risks of too many credit cards:
(1) Too many credit cards make daily management inconvenient, easy to lose, and have a higher risk of being stolen.
(2) If there are too many credit cards and the total credit limit is too high, it will be difficult to apply for a credit card, and even applying for a loan will be affected to a certain extent.
(3) The repayment date of each bank’s credit card is different. If you have too many credit cards, it is easy to forget to repay, resulting in overdue payment.
Consequences of overdue credit card:
1. Liquidated damages, usually 5% of the minimum repayment amount and the unpaid part.
2. The interest is high, and the interest is compounded. The interest rate is very scary when the debt is large.
3. Overdue credit records will be stained, resulting in the inability to handle financial needs such as house purchases and loans within the next two years.
4. If the payment is overdue for more than 3 months, and the amount exceeds RMB 10,000, and the bank has failed to pay multiple reminders, you will not only have to bear the repayment, but may also bear criminal liability.
That’s it for the introduction to why credit cards are risky.