Tuesday, September 16, 2008

CREDIT CARDS NUISANCE OR BOON

When we were young taking money from someone.....was considered a liability,loan, Karja.....not considered very good and it was taken only in the dire need or really bad circumstances. Whatever we wanted to have in life.....needs or wants....for both we were taught to save and then buy. and Credit was a complete no..no...for wants, it cud be indulged in only for needs.
I remember that this lesson was so well ingrained in my mind that i never even took grocery on a monthly payment,which was the norm in our locality, always paid immediately for anything or everything.
Then the times changed and CC came into existence, we were followed incessantly by people (banking) to take their CC, and initially I took one from BOB, but didnt like their system, once the deducted the yrly fee whereas the card I am yet to get and then that mental phobia, which was strengthened by many stories i heard from my friends of getting false statements and then having to pay some settlement and all that.I always prefer Debit cards.
And today the times have completely changed, everybody must have multiple cards.....sort of status symbol, then sometimes to keep up with the zoneses over spending is done, then the payments are done by circulating the cards and ultimately one is in a mess.I have been reading many cases in magazines, where CC........easily available money distorted the vision of many, and tempted them to buy luxuries.
I always say our old Indian way of life.....that is earning first and spending afterwords was and is much better than this new concept where u spend first and then earn.becuase then earning is the projected one, not real, and life can never be predicted in advance.And if anything changes the pattern, it becomes a vicious circle. In laymen's language( sorry Rebel:) this is what is the reason for this sub prime effect which is going to bankrupt ..dont know how many......
I know that i am an old fashioned person and life cant move today without credit cards, we must move forward with the paper money and all that,but I think there must be a limit to the no. of cards one can take and then total limit for the spending, these companies get greedy in the beginning ,for increasing their customer base and numbers game but later on everyone is the loser, the percentage of interest charged is very high and not in the interest of consumer.
IT IS LIKE SCIENCE---IT IS A GOOD SERVANT BUT BAD MASTER.

29 comments:

Cess said...

have lots of credit cards;) well not really have one in France, we call it credit card but it s not really one, well u can choose to have either direct debit on it or paying at the end of the month, i took direct debit, i d prefer to know what i expense right away. Since i m living in ireland i have laser card ;( which is like a debit but u can t buy pretty much anything on the internet cause it s not a visa or mastercard, so i have a real credit card to pay my flights for ex, it s ok, i managed usually pretty well, but yeah i don t really like though, it s only cause i can t use my laser to pay flight i took it!!! ;) And I know lots of people are abusing it, it s bad, pressure by all these banks, get discount if u take this credit cards and so on, lots of people have to declare bankrupt of their own house, not company but house cause they are submerged by those nasty credits!!!!!

SR said...

U are right - the main cause of sub-prime is exactly what you have mentioned - spend first and earn later! Now the markets are crashing big time and it seems we need to sort out the mess that we started in the first place! India did get smarter when it was heading towards to this disaster but that doesn't exclude it from the effects of the crisis in the western world.

Swats said...

Multiple cards! LOLZ
I don't have a SINGLE credit card! and I still think I'm IN ;-)

I am very comfortable making a CASH PAYMENT no matter hw huge the sum is..

aneri_masi said...

I still follow the good old rule of spend only what you actually have! And get really nervous if my savings go below a certain threshold. Still do use the CC wherever possible for a few reasons...

1) I get an accurate account of where I spent what. Most CC's have this thing where you can easily download that info into your accounting software.

2) I can earn miles or rewards or free gas or whatever else with every dollar i put on my CC.

That said, I NEVER spend more than I have, unless of course its a car or house :)

A rebel all the way... said...

even i have this habit of repaying my debt as soon as possible...i hate the concept of udhaar...it feels like a burden to me...i use my credit card only when I am unsure how much balance I have in my debit card account...
but most people in western countries survive only on credit cards...and thats the real reason why all this mess has happened...too much leverage in the system (am being more geeky here)....
waise i have noticed even i am pretty old fashioned in my thinking...just like you...hehehe....

Piper .. said...

you`re so right Renu. America`s economy is going downhill esp because of the crumbling credit industry. i`m glad it isnt so in our country. Credit cards can be useful if used judiciously. But for younsters who dont quite understand the value of money yet, it can have disastrous consequences. I`m glad you think so too.

Swats said...

i cant c any of my comments..i keep posting but they never seem 2 show up..kya problem hai?

Renu said...

Cess; Its not bad to have credit cards, actually its upon us where we take it as a blessing or turn it into a curse.
And the fault lies at many places for like..
First culprit is the today' consumersim, where things are bought not for their utility but to be IN.
2-with tha parents who never teach their children the value of DELAYED GRATIFICATION, instant life,instand food,instant dreams and their fulfilment.In our time we never expected to have everything in the beginning of our life and we were happy. We saved and slowly slowly got evrything and it has a charm of its own.It teaches u restraint,value of money, hard work, discipline everything.
3-are banks, who..for the sake of increasing bussiness....though i dont understand their bussiness sense as giving credit without ant thought is not good, as initially they can make up the nos, but later on..........they are going to suffer, but they lue the customers with offers, keep on pestering them.
4-this is the ultimate culprit..one who uses it indicriminately, if u are big enough to have a CC, bvetter learn to be responsible also.They must never forget this golden line..
FREEDOM BRINGS WITH ITSELF A LOT OF RESPONSIBILITIES.

SR:With this globalisation, we are connected to the globe...anything and everything affects evrybody, somewhere directly and sometimes indirectly.
Abroad..one thing i disliked very much was their servings in the restaurant.....it may be a bussiness sense to sell at a time big thing, but what is not good for consumer can never be good in the long run for bussiness houses. everybody orders evrything and leaves alot of left overs.The same pattern is being followed in India, we are getting an iceream for 200/ or something like that..a minimum price with a big serving, O always say, give me a small helping, i dont eat that much and make it cheaper also. Its friendly on the pocket also and my stomach also:)

Renu said...

Swats: hats off to u Swats, I like this:) I always say..do everything because U want to do it, not because evrybody else is doing it:), dont ever come under any pressure, peer or any other type.

Aneri_masi: Thats the best way, and CC is not bad, its avery comfortable idea, but people are hell bent upon make it a curse or taboo.
And Car and House i dont consider them expenditure, they are investments. it will good going for u always:)

Rebel: first of all thanks for the left handed compliment:).U know, my father was a respected personin the community and i always had this at the back of my mind.....his daughter taking anything on Udhaar..no way, even sometime I wud go to walk after dinner with my husband and then if I remebered something needed for the BF, and the shopkeeper knew us, he will say.....take it madam, give me the mobney tomorrow.....but for me my name written somewhere for udhaar...cudnt stand....call it my ego or self respect, i wud rather mak something else for BF,.
hile abroad i always wondered..how come people buy and order in the restaurant with a care a damn attitude, with god's grace we are also fine, but I always see what i am ordering, know what i mean:)

Renu said...

Piper: i am happy that you agree with me,I alway feel scared of India, US is a prosperous country and can withstand these upheavals, but the same trend is catching up in India and I shudder to think..what will happen to us.

Monika said...

I agree with u partly, CC is a necessary evil these days :) but they are really good id used diligently I had once read about a couple who got their whole international vacation sponsored by CC points after due planning... I also make a lot of money and household stuff by CC points... they key is in spending how much u can afford and keep paying the complete amount end of the month.....

Jayashree said...

If you know your finances, and don't spend more than you earn, there's no harm in credit cards. But you really, really do have to take care to not go on a swiping spree. I used to work in the cc industry and I've seen people who get caught in that vicious circle you talked about - they used to pay off one credit card with the other and keep doing this 'coz they didn't have enough money.

Renu said...

Monika: u r right,I have said so myself that its upto us whether to make it a blessing or curse.many times it comes quite handy for sudden purchases or requirement and saves the hassle of carrying money.The need is for the restraint in expenditure or spend in ur resources , there is a saying....jitnee badi chadar ho utne hi paon failaane chahiye...its in hindi---spend according to ur income, neither exceed it, nor spend it completely, saving is the clue to ur happiness.My children also buy many things from their points and and sometimes a vacation in a yr, but in India not everywhere card is taken, many times they charge 1% more or so and me being a no wastage person:) end up paying in cash.

Jayshree: I have been reading it everywhere..people taking personal loans and then not being able to pay up, CC balances and all that. I personally can never spend all i have even,leave aside spending on loan, I know that i am over cautious person and sometimes too much safety retads ur financial growth also, but i need a certain balance to live happily, i prefer such finance management where in the hour of contigency u dont have to run anywhere.

HOBO said...

Read somewhere :
Money is a paper whos value is created in mind.
I say :
CC is a card whos value is created while buying.

my space said...

Renu-I too believe in' Jitni chaadar ho ,utne hee pair pasarne chahiye'..CC`s are great when used judiciously-so unless you are not very clear ,steer clear from them. Though I feel a lot of people use and keep multiple cards as a status symbol. Pehle toh udhaar lena bahut sharam ki baat hoti thi, aaj toh fashion hain!!

Renu said...

Hobo ; well said:)

MY space: These are the modern times, give anything a fancy name and voila....its a in thing.udhar bhi bade logo ki cheej ban gaya:)

ugich konitari said...

We were never such a consumerist society in our childhood(early 50's-60's). Shopping was a need based and NOT an entertainment activity. Those who vicariously live on credit are setting such a bad example for their children. An entire new generation being taught the wrong things. One worries.

Renu said...

Ugich Konitari: Yeah, I worry so much about this trend, they are setting a bad example for their children, but in the long run I see its very bad impact on all around.....people,country,world.

Monika said...

i agree (and this time fully :) ) ki jitne chadar ho itne hi par pasarne chahiye ya theat 1% or 2% is pretty much a pain and when u become used to cards one doesnt carry cash and ends up paying that extra money too

Renu said...

Monika: so the day arrived:) sometimes even the big shops say the same thing, in Hyd I bot washing machine, and most of the big shopwrooms said that they will charge extra for card:(. We still have a long way to go.

sansmerci said...

i left a big comment here .. where did it disappear :(

DeeplyDip said...

I am a big time cc user! I prefer to spend by card rather than cash -just find it easier. Having said that, I keep a mental check on the amount spent, and my hubby does a good job of keeping the finances in check. I agree with you, if not used judiously, it can be a very dangerous tool.

Renu said...

Sansmerci: I am sorry, please tell me again, I dont know whats happening, Swats also had the same complain, this way i am going to loose all my readers:).

Deeplydip:I always feel that in a couple one must be financial savvy, its a prequisitie for good financial health:) Since they started sending the statement thru email, it is easier to use CC, earlier they will always send the statement so late that due date is either very near or already gone

Shalom said...

There's this American serial called Boston Legal which usually attacks whatever's wrong in American society. One episode targeted CC companies. It seems they purposely market to ppl whom they know will have difficulty in repaying their debts; customers who pay their bills on time aren't as profitable as those who default on payment. So these companies come up with bullshit schemes like 0% interest & all other nonsense to lure ppl in.

I personally love to shop :D, but only for what I can afford. I have never owned a CC, but I think the day will come when I would have to....but I don't think I could be comfortable with more than 1. It would be a burden on my mind.

Renu said...

Shalom: exactly the same thing I noticed, actually the interest and penalty they charge is so high that real income lies there, i also saw myself that they will send the statement so late, that i will end up paying penalty evry month, so i stopped using it. But that is not the solution, this is the escapist route.They must be reined in and insisted on fair play.
Now i keep getting phones for various schemes, i dont even listen becuse sometimes they just say--u assented it on phone and all that nuisance.

Balvinder Singh said...

yaar mainey yahaan ek lambaa chauraa comment daalaa thaa. Pataa naheen kahaan giyaa. It was basically in favour of the credit cards. I will post the same in my blog some time later.

Renu said...

I am so sorry, i dont know whats happening will have to ask my daughter, please do it again, i wud love to see it.

Abhinav Agrawal said...

thts a very nice n thotful post. ur writing style is very nice and i completely agree to ur thot. I am a slave of credit cards and I cant survive without them...

anyways thnx for stoppin at my blog.. i did my schooling from Nanital Sherwood for some time and m in love with tht place too
cheers

Renu said...

Thank u Abhinav !
When I see our youth being sucked by these thing I really feel sad, as I said in the last line,nothing wrong with CC, its a good facility and fasce of things to come,Its upto us to us it judiciously.
Since I belong to western UP I feel a bonding with evrything related.
U r in Seattle, now my daughter and her husband are also moving to seattle next month:)