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Handle With Care: Credit cards can hurt more than they help

Credit card pros and cons: Be mindful and rack up your spends only as much as you can comfortably afford to clear each month. Anything more can mean trouble.

July 14, 2025 / 16:10 IST
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Credit cards are convenient payment tools, but lack of disciplined spending can disrupt your finances

Sreenath* is a compulsive spender, has four credit cards, and uses them all. He struggles to pay his bills occasionally, and draws cash from one card to clear the dues of another. Sometimes he tops up a digital wallet using one credit card and uses that to pay the bill of another one.

He is aware of the charges (about 2.5 percent of the amount withdrawn) when he withdraws cash and is also aware that he will be charged a fee while transferring money to a digital wallet. But often has no option.

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That was not a problem Rakesh faced. He wanted to take advantage of the credit period available in every billing cycle, and had linked his bank account to the card to avoid missing payments. He did this as he knew that keeping bills pending leads to hefty charges. On the flipside, in case of any wrong billing by a merchant, the amount would get paid automatically. Rakesh had never faced this though.

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