Gen-Y and the plastic money

The connection that today’s generation shares with plastic money is almost shocking.

While there are many who use it judiciously without being lured too much by its fancy, there are others who have almost turned bankrupt Youth of today, while they can be excellent engineers, entrepreneurs, doctors, and so on, when it comes to money management they often find themselves in a pickle, especially men. This is particularly so when it comes to credit cards. The connection that today’s generation shares with this small piece of plastic is almost shocking. With many tempting offers that most banks offer in credit cards, it becomes almost impossible to resist from owning one. The reason, rather the justification, one gives to oneself for owning this is: “Can be used in times of an emergency without having to depend on anyone.” But what these credit card users don’t realise is that if they don’t play it safe, they might end up having to depend on far too many people to pay off their debts they incurred with credit card usage. Jacob, a 27-year-old, who is home for his vacation says, “In the Gulf it is a criminal offence to default on your credit card payment. Hence I use it judiciously. I use 50 percent of my credit limit which is 70 percent of my salary. And I get returns through reward points. And there are times when I don’t use my card for almost 2 months and thus by saving up a little I spend about 90 percent of my credit limit and get massive reward points and also get 56 interest free days to pay it back.” Drishya, a dentist says, “I had a credit card but I rarely used it. It was something I had kept for emergencies. I wound up taking one because of the incessant calls I used to get and thought of trying one. Now that it has expired I am not planning to take another. The first three months without it was difficult. It is just like owning a mobile, you feel you won’t be able to live without it, but if you can manage 2-3 days without it then you can grow out of the addiction.” While there are many who use it wisely and judiciously without being lured too much by its fancy, there are good many of them who have almost turned bankrupt because of heavy credit card usage. “I started using credit cards when I was barely 23-years-old just 6 months after I landed my first job. At first though I never paid heed to the calls I got from the banks, later I too felt like owning one. The offers credit card companies made were too tempting, and without proper knowledge of its ways it was easy to fall a prey to it. Since I had a steady income, I thought I could pay them off very easily every month,” says Rameez, an IT employee. “But situations changed when I was shifting jobs and didn’t get my salary for almost two months. By then, I had almost 4 credit cards, the payments got pending and soon after I got married and had to use the cards again, which again added to my existing debts. Now my salary is only enough to pay my credit card debts,” says this 26-year-old. Most of them use the cards for booking movie tickets online so that they can avail of ‘the buy one get one offer’ and to book flight tickets where discounts are offered. Online shopping sites too have offers/ discounts for certain credit cards. With these they could earn reward points on their card with which they can avail of free gifts or do shopping on redeeming credit card reward points. But the shopaholics the gen-y are, it never stops at just this. “I was a victim of credit card misuse too, when I used to have multiple cards. But now, I have reduced it to one which I try to use just for emergencies, though sometimes that might not be the case. These things are really addictive with its multiple offers and you end up using them more often than you intend to. But I think if you know how to handle it wisely then maintaining just one wouldn’t be such a bad thing. Using them for shopping is fine but you will really be in trouble if you ever use it at an ATM. The service charge that they deduct is just humongous,” says Mukesh another IT employee. There are a lot many of them who have learned much about the whole affair from the mistakes committed earlier and now use it wisely. “Certain banks don’t tell you about the hidden charges involved and other ways in which money is deducted from you. For some credit cards there is an annual fee. Sometimes for the first year this fee is not deducted from you. The customer may not notice it initially or he may not be informed that the provision is just for a year, but from the second year onwards the customer ends up paying an annual fee and if by any chance misses out on fee payment, then the fine, the credit card companies levy is too much,” says Rithvik a seasoned user of credit cards. “Thus the key to using a card is to keep a track of the billing cycle and the exact dates of when it begins and ends. Make your purchases in such a manner that you will benefit maximum interest free days. Stick to 2 cards at a time and you will be able to play it safe,” he further adds.

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