Is Having a Credit Card in Pakistan Good or Bad?

March 05, 2018
Javeria Atiq

Jobs always come up with a limited return and there are times when a person may need some additional help. This can be in case of emergency or any other financial need or urgency. For this reason, we can see a number of people using the credit card to meet needs out of their budget or monthly income.

Credit cards are not only an additional source of income in hard times but they also help you to build a strong financial profile, in case you may need some financial support for your business startup in future.

By not having a credit card, you can never own an appreciated credit card score on his/her name (the score is generally offered by the credit card authorities). But there are many reasons for suggesting not to use a credit card. Where there is almost an equal amount of people rejecting and appreciating the use of credit card, there is also a considerable amount of people who believe that it’s not the credit card, that is good or bad, it is the use of these facilities and about how we take the chances and utilize them in our daily life.

This article is written with an aim to review the two sides of the mirror and find what makes some people believe in the worse of having a credit card while others just focus on the goods of it.

The Pros of Credit Card:

If used properly, a credit card can bring the cardholders with a number of benefits. Some of these advantages are as follow:

  • They are a great help in case of emergency
  • They can help and appreciated in holding reservations
  • As compare to other tools like debit cards etc. credit cards offer additional protection against any kind of fraud especially while doing online shopping
  • If you choose the card wisely, you can get bonuses, flyer miles, cash rebates and others
  • If used carefully, the credit card can earn you a positive credit history that can, later on, help you in a number of ways

The Cons of Credit Card:

If you are not using your credit card wisely, you will surely face a number of issues and financial imbalance. Some of the most devastating impacts of credit card can be as follow;

  • An irresponsible use of credit card with earn you a negative credit history
  • Negative credit history will earn your negative credit scores that will be a hurdle in a number of issues in future
  • You will face a number of issues while applying for loans, or leasing a car etc.
  • You may go overboard while using a credit card and most of such cases have been found in females as they tend to be an impulsive buyer. This means that they own a credit card and they out for shopping they generally end-up buying stuff that is out of their budget, or not in their need.

Credit cards are not a bad thing, until and unless they are handled by a person with wrong intentions or who is bad in dealing with his finances. If you own a credit card, important is to use it responsibly. If you do this job right, you will open up a door of amazing opportunities to you.

Related Read: Want your First Credit Card? These Requirements from Banks you Need to Know

The most important thing to do while dealing with a credit card is to pay your credit in time. If you fail in doing so you are likely to end up facing difficulties to get your loans approved, lease a car and get a business loan. If you are not paying your credit in time, you may face serious issues like becoming a defaulter of the bank. We won’t suggest you to not to use your credit card to pay your bills, but pay them wisely and do not become over debt.

There are a number of good and bad aspects of using and paying your bills with a credit card. If you are not sure about is the credit card is good or bad, look at the following aspects and decide on your own.

Superlative Aspects:

Immediate fulfillment: let’s say that you are willing to buy a mobile of the latest model which is about PKR 50,000, but you do not have that much cash in your pocket at the moment. Rather than taking months to save that much amount or asking your friends and family for a loan, you can use your credit card, pay the bill take your new mobile and leave. All that you have to do is to pay the bill at the time of few months. This way, the credit card becomes the most efficient and cost-effective way to pay your bills in tough times or when you lack money.

Convenience and Safety: Going for shopping of an expensive item with cash in your pocket is really very risky. You may get robbed by the corner of the street, but no one can harm your hard earn money if it is lying in your bank account and in the form of a credit card in your pocket. Thus, going for a credit card will keep you secure.

Reward Programs: The best credit cards in Pakistan are offering its customers with the jaw-dropping reward programs. Such programs offer you points that can help you in cash, travel or good services, each time you make a purchase with your credit card. If you keep your credit card charging nicely, you will end up with no debt to you.

Dreadful Aspects:

Overspending: The open line of the credit card is the most dangerous yet attractive thing. While you are in the store looking for a TV and you come up with the laptop that you are inspired with, and you end up buying both of them is dangerous for your bank account. People are seen spending more than they can afford, by using their credit cards. This is really dangerous for you. Thus to use a credit card, the control on your spending habits is a must.

Related Read: Visa Or Master? Which Credit Card you Should Go for?

Fees and Interest Rates: Despite you have planned to pay back your credit card for the TV, in three months but you end changing your priorities. Rather than paying it in the decided installments you start focusing on requesting to pay a minimum amount per month and skip one or two cycles. In such cases, the interest will shoot up. And you will have no idea when the bargain turned into a high debt. The only way you keep things align is to pay the balance in full or in minimum time.

Long Impact of Mistakes: Despite it is bad to be the charge for PKR 5000 for delaying or missing a single payment but, breaking the rule will also bring you some long-lasting negative impacts on your credit report. This flaw in your credit report will stay with you for a really very long time and will keep pinching you in a number of ways. If you own a card, you need to keep your credit report as clean as possible.

Identity Theft: What will you do if your card gets stolen and someone shops the TV instead of you. Although you can register a complaint about the card theft and misuse and you will not have pay for the TV. But the thieves these days are very smart they have got their hands on skills to apply for a credit card in your name and rob your identity. Thus, it is important for you to know where your credit card is and who is using it and for which purpose.

By reviewing all these goods and bad we can come to only one conclusion that it’s not the credit card itself that makes it good or bad, it the person who owns and use it. If used properly you can come up with a number of benefits from the credit card. However, if you are not careful and concerned about your spending and buying attitudes, you are not looking after your numbers on the credit report, you will have to face some long-lasting negative impacts.

Related Read: Top 5 Reasons your Credit Card Application can get Rejected

Thus, before heading to check the credit card requirements, check your own habits of spending and alter them before taking a credit card in your hands.