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Disadvantages Of Credit Card.

Dis advantages of credit card

Disadvantages Of Credit Card

Disadvantages / Demerits of Credit Card

Some persons have the tendency to overlook the disadvantages of a credit card. Besides, they are also unaware of the chances of increased costs of items compared to buying them on outright cash. A few basic disadvantages of credit cards are:

Interest Charges on Each Transaction Followed By Unpaid Bill

Interest is levied on the following transaction(s), if you don’t pay full due amount of previous bill amount. If you make only partial payment of your credit card bill, interest will be charged on balance amount AND also on all the following transactions.

Too many charges

When the payments are delayed beyond the due date, the average late charge may be Rs.1800 and hence if 3 payments are missed by a day, you will end up paying thrice the above charges. Is that really worth it?

Annual Charges

Next come the usual annual fees coming with credit cards which again will jack up the cost of items being bought, which may go unnoticed. Besides, some transaction fees is to be incurred while buying certain items, though this fee varies from card to card.

Charges and Fines for Excess Usage

Based on your track record, sometimes banks will allow you to use more than the credit limit. If you use more than your said credit limit accidentally, you will be charged a huge sum of interest, processing and transaction fees. Credit Card holder must remember his/her credit card limit.

Hasty Purchase – Crushed Budgets

Easy availability invariably results in unscheduled and hasty purchases. If there is a shortage of enough money to settle, beware of incurring additional interest burden which will further escalate the bought out price of the purchased product.

Misplaced card/ Fraud

Credit cards are vulnerable to be misused clandestinely though they may be safer than carrying cash. Besides, cards are vulnerable to an entire diverse sphere of misuse, while stolen cash has different implications altogether. Hence, remember to inform Police, bank, credit card issuer when the card gets lost. Otherwise, you may further lose huge amount of money.


Use only trusted and known websites when transacting online. Ensure the safe custody of the cards and keep them at places where its missing can be noticed easily. Notify the card issuer immediately for blocking the card to prevent any misuse. Avoid conveying personal details over the telephone. Always keep handy the information regarding the card number and customer care contact numbers, to be able to use when in emergency.

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