Card or Cash

People these days believe and feel more comfortable when they have a plastic card on their wallet. I would rather say most of them like these plastic cards but not all, because there are few smart and successful people still follow the ancient way of using the cash. Here, i am making my point very clear that i am not against going digital transactions. When we still narrow down about the word plastic, i would summarize there are good and bad plastic card. Now, you would have got the point, good plastic being the Debit card and bad plastic being the Credit card. Yes, i meant that exactly

Most of the banking institutions or lending institutions are looking for working class people (or people who started to work recently) and their target is to give them either credit card or a loan. Do you think banks are very generous to give us 45 days money for free and without any charge ?. Many can argue that, the banks don't charge for credit card purchases if they are paid with in 45 days (days might change according to the country or lending institutions). Now, let me argue with you, if you have the capability to pay the credit card in 45 days then why can't you hold your purchase for 45 days ?

Banks or lending institutions are very clear in their study that once you started to use your credit card and when you are admiring your card purchases, you will start to use it more. There will be a day sooner that people will encounter to postpone the day of paying their credit card bills by just paying their minimum payments. Banks will wait for that day to come. The time or waiting period is their investment and till then they are ok to give you money for free (what we think so). This is like catching a fish. They are good in waiting, cos in financial world one with huge patience will win. Banks and financial institutions are masters in knowing this

Ok, lets not think too much in knowing if the credit card purchases are good or bad. Let's think paying cash for all your purchases. Ask a question yourself, would you feel privileged when you pay cash or paying through credit card ?. I also assure you that when you pay cash in your business deals, you will get discounts. That is exactly some credit card companies do these days to attract you much to use credit cards. When paying cash we don't owe anyone and the deal gets close there but in credit card the deal is not over, the deal actually gets started. You will see a bigger smile on your bankers face

It is also a fact that, when we fix ourself to pay cash for all our purchases, we will spend little and only on the need. We will build the character of postponing the purchases and will think if that is really needed. Bankers kill our thinking power of analyzing if the product is really needed by just issuing a credit card. Let us do one thing, immediately after you received your salary withdraw all the cash (except for the EMIs - if any) and spend cash every month and see how much you can save. You will get that wow factor within a month. Cash is King

It is a known and proven fact, most wealthy people build their empire not by using credit cards. They know how to live life below their means. Wealth generation can never happen (or it will be much limited) if you have 1 or more credit cards. Credit cards not only make the wealth generation slower it also avoid us to think of an emergency fund creation. People with credit card will never think of emergencies cos they have that in mind that credit card can be used during emergencies. Now when that actually happen, you can see a much bigger smile on your bankers face. Think twice and take action on saving and investing with having proper back up in place. Atleast give a try to survive without using credit card for a month (entirely on cash), then you will feel your true power and worth

Point to Note: Debit card is as good as using your cash. If you like giving your card on your purchases, try giving a debit card.

Have a Great Day

B G Nareshkumar