Wanna increase credit score? Here some information that can help to increase your credit score

 A debit card is directly connected to your bank account for example if you have $1500 in your bank account then you can only do shopping worth $1500 from

your debit card and money will be deducted instantly. Now let us see what is a credit card

A credit card has no link with savings in your bank account. A limit for you is decided on the basis of your salary or any kind of income which means the company will give you a limit, for example, $1500 then you can do shopping worth $1500. Whether your bank account has $0 saving it means banks give us loans to spend the money while you don’t have at the time.

Benefits of credit card:

 The biggest benefit is that for an estimated 50 days (varies from bank to


bank) we can get interest free credit. For example, you got a credit card on 1 January and the limit is $1500 and you use the limit on the same date only you will get 50 days to pay back, the bill will be generated on 31 January and you have to pay on 20 February which you can use the money for 50 days interest-free. It is possible you may have $15000 in your account and if you have a debit card then the money would have been debit which means while using a credit card you earned interest on $15000 from the bank which was in your account and used $15000 interest-free by credit card.

 Safeguard from fraud transactions

We often do online shopping many times using international websites we use the debit card by just putting card CVV number and payment is done without any password. Hence it is not considered a safeguard

because details of tour cad can be misused and all the savings can be stolen but if we use a credit card only certain limits can be lost not all the savings. Risk cannot be omitted but lessened.

 Improve credit score

As youngsters if we wanted to take a big loan we will require a good credit score but being a beginner no much history would be linked to us and credit score would be average but if we use a credit card regularly history would be created about paying bills and it will improve credit score and we can get a big loan

There are many things about credit card which can even harm us

Now a question arises what is the benefit of banks in using credit cards. Reasons are below

 High interest after 50 days

The bank issues credit cards so that customers should use this in an unmanaged way and we can spend in lots without thinking much. If we earn $15000 a month bank wants we should spend $20000 in a month. They want so because they think you should not return those $20000 in a month and when day 51 starts a heavy interest is imposed like 36% and 40%. If we take a normal loan we have to pay 15% or 18% but in a credit card, it doubles. The main motive is that you should not be able to pay money in a month and the bank can get that 36% interest. Another thing is that if you fail to pay a bill in 50 days and when 51 days will start bank will charge interest for the whole 51 days not that 1 day. Hence we should spend only that much which we can pay later.

 A credit score is also declined

When we are unable to pay the bill if credit card banks start decreasing our credit score also

Another thing we should consider is we should not pay by the method of minimum payment because if we pay a small amount in one month next month after charging interest on rest the principle amount will remain the same again and you will pay every month but the principle will not decrease. Try using the auto-debit method.

Now let us talk about those who have fallen into the credit card trap

The best way is if you are not unable to pay the bill and pay interest as 36% per year which is very high then you should take a personal loan whose interest will be half approx18% and pay the principal amount of the credit card and if the bank is not giving a personal loan then ask a family member or

friends to help. This way interest burden will reduce.

Now the bonus tip is

 Never use a credit card for withdrawing cash

We usually go to ATM and withdraw cash with a debit card and the amount gets cut from the savings account but we should not withdraw cash from a credit card as if we withdraw cash before 50 days also this will charge us interest

Hence credit card is only for cashless transactions.

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