Sometimes, it’s hard to understand what’s going on with credit cards. A single bank can come up with many different types of credit cards. All with individual features and benefits (and pitfalls as well!).

Let’s have a brief look at some of the different features of credit cards. Please take note that I’m writing based on my experience and past readings. So, if you notice any inaccuracies or you’d like to add some points, do share your thoughts as well.

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Like I said in a previous post , it comes with great responsibility to have a credit card.

There are a number of dangers with owning credit cards. Some of them are:

1. You might get yourself in a mountain of debt. If you keep on spending and only pay the minimum amount every month, it’s as if your debt becomes indefinite. Default the payments and you might go bankrupt.

3. Credit card interest rates are the highest. It’s not a cheap debt.

4. Sometimes, it’s hard to stop when you gain momentum in spending, thus leading you to spend up till a point of not being unable to pay.

5. Fraud. Somebody could steal your credit card details and you won’t even know until it’s too late.

6. The perks and rewards that come with the credit card can tempt you to spend more. Often, credit cards reward you by spending more (accumulate points, gifts, and etc.) and this might lead you to do the wrong thing, i.e. spend more.

7. As mentioned again and again, credit card = BAD DEBT.

8. You run the risk of not being able to track your spending. The next thing you know, you are served with a statement to pay by the end of the month, and you realised “Shit, I can’t afford this!”.

As usual, share your thoughts below.

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Due to my being an investor with Public Mutual, I was offered by Public Bank to apply for a credit card. I see some good in owning a credit, so I decided to do so. Read here.

My application has been approved and as of now, I’m waiting for it to arrive.

This will be the first time ever for me to be a Principal Credit Card holder.

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