• May 21, 2024
  • Washim Sarwer
  • 0

We are all now familiar with the term plastic money, and due to the growing landscape of digital payments, people are now more likely to use their cards and e-wallets. Now, while delving deep into the aspects of plastic money, one needs to understand why a person is considering getting a credit card and how one can use it effectively. 

In today’s blog, we will try to find a line where one can decide how much credit card usage is necessary and what things one needs to consider to decide how much plastic money is effective for the person. 

Why a Credit Card is Useful? 

Now, a plastic card is useful because it allows one to get access to funds and spend for various purposes. One can consult with a credit card DSA, which can guide an individual about the main role of the person, and based on that, they can start having the advantages of plastic money. 

  • Security and Convenience 

Credit cards are a great tool through which one can make secure transactions. In transactions with plastic money, a person doesn’t need to pay directly from their bank account; rather, it’s the bank who is paying the merchant on behalf of the bank. 

There are some chances of fraud when a person is doing online transactions. Through the use of a credit card, one can find it convenient to attach and link the credit card with that particular app or website, and through that, one can make automated payments. 

  • Credit History 

Credit history is something that a person needs to build so that they can get future credit options with better interest rates. A person who makes timely payments builds a strong credit history where the individual shows how much time they can make the payments in time. 

It helps a person build a strong credit score, which makes them eligible for higher-interest loans, which helps to demonstrate how creditworthy a person is. 

  • Rewards and Cashback 

These are two amazing parts of using plastic money. In cash payments, people hardly get any chances of winning rewards and cashback. Here, the banks and financial institutions offer chances for the card users to get rewards for spending from the credit card and earn cashback, which one can use in their next transactions. 

Risks of Credit Cards 

Certain risks are attached to credit cards, and through that, one can fall into a debt trap if they don’t maintain their credit profile properly. It’s a double-edged sword; on one hand, one can take full advantage of it, while on the other, it’s an instrument that can make you remain in debt for a long time. 

  • High APR

The credit card has an Annual Percentage Rate (APR), which stacks up in the name of the cardholder if they don’t pay the full credit amount each month. Slowly, the debt starts to accumulate, and for that, a person always remains in the debt trap. 

Probable Solution: It’s a good practice to pay the entire due amount each month in full so that one doesn’t get the hefty interest rate. One can also consult with a DSA channel partner who can guide a person about getting a plastic card and let them know which banks take less interest. 

  • Overspending 

Credit cards inculcate within a person about the tendency to overspend. It is a psychological hack where a person doesn’t feel like spending real money, and thus, they tend to go overboard and spend more in a market or online.  

Probable Solution: A person needs to create a budget, and for that, one needs to practice self-discipline to avoid unnecessary purchases. 

  • Debt Accumulation 

A credit card is a dangerous tool through which a person can accumulate debt, and that can add a lot of financial pressure, making it challenging for a person to cover all their debts. 

Probable Solution: One needs to keep track of their spending, and through that, they can have a clear understanding of where the person is spending their money and can pay it off in time without crossing the deadline of the credit payment. 

By analyzing both sides of plastic money, one can decide to what extent they will be using that financial instrument so that, in the end, it benefits them. 


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