Living Life On Credit: The New Youth Mantra

By Madhav Gupta:

Gone are the days when you required a trusty Bank Account or saved money for months or years to purchase the items you wanted.  The days have come that you can buy any item; any item which is worth may be equivalent or even twice your Annual Salary.

We all know that Indian economy is booming but the credit economy is booming threefold. 20 years back when a person got a job he/she would get a salary bank account and a cheque book, ten years later a new employee would get a Debit card as well, but now as soon as person get s a job he would get a credit card from the Bank too.  The credit card users are increasing at a rate of approximately 15% annually. In a survey done among 100 employees of an MNC, 89 had a credit card and around 40 had multiple credit cards. And surprisingly one of them had 14 credit cards, each providing him credit limit equivalent to his annual salary.

As far as loans are considered you can easily get a pre-approved loan if you are employed in a reputed company. The loan from your salary bank account provider is just a call or SMS away and the money will be deposited in your Account within 48 hours. The personal loans are the most in demand and are also the bank’s youngest and most fruitful child.

The world has just faced a global recession few years back, and big thanks goes to USA for this. Although USA is the world’s most powerful economy, it is basically a credit economy; you can get a loan there without even submitting anything as a guarantee.

Credit Cards, the Devil in Disguise.

Most people get a credit card basically to avoid cash scarcity during month-ends or for unforeseen situation, little knowing that careless use of these credit cards makes you see these unforeseen situations. Because when you have a credit card your limits increase, in a normal salary you are constrained in that for the whole month but over the period you end up spending more than salary saying you will pay the credit card bill by your next salary or in instalment, which at that point may seem small but gradually increases. If you are not careful with your money, you will quickly run into trouble and will need a list of credit repair companies to come to your rescue.

Credit Cards- The Ultimate Saviour

Like each coin has two sides, credit cards have their own unmatched advantages. Like,

• In the hour of need, you can withdraw money from any ATM machine like you do with the debit cards.
• If you have made an expensive transaction, it can be converted into instalments at a minimal rate of interest. (few banks even offer 0% interest on instalments)
• You get reward points every time you swipe your card. These reward points can them be redeemed for various offers and goodies.
• One credit card can be used to make a bill payment for another credit card.

All in all the dependency on this plastic money has been increasing and especially the youth is highly fascinated and lose control. Credit cards are manmade power whose limits are quite endless. It’s upon us how judiciosly we use them.