Credit Card - Your Friend Or Foe?

Ashvin Sharma Credit Card Show

Even before you apply for a credit card, and certainly before you use it, ask yourself this question: Is a credit card your friend or your foe? Perhaps it’s your friend when you need or wants to make a purchase and it’s your foe when you struggle to pay the bill. True, but this sort of situational logic isn’t really helpful if you’re trying to develop a healthy perspective on paying with plastic.

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In truth, a credit card is neither friend nor foe, it’s simply a tool: useful for some jobs, ill-suited for others. An electric saw is a great tool for cutting wood, but not so great for mixing cement.

You get a free credit period

When we pay using a credit card, we are essentially paying the bank’s money instead of depleting our own cash balance. Different credit cards give a free credit period between 30 to 50 days. This can be very helpful at times. For example, when you have to pay a security deposit to rent a self-drive car or guarantee when staying at a hotel. Typically, if you use a debit card the funds in your bank account get blocked thus affecting your liquidity.