That's how you spend your income that you've not even earned yet.

Suppose you're in a mall & it's a wonderful day to shop. You're probably looking for stuff you need to buy, you find it in some store and boom!! Surprise..! Storekeeper told you about their ongoing program which is basically you buy something from them today & pay for it later, say after 30 days or something and that too without paying any extra money.

Would you buy it? Yes, because you are smart.

The more important question here is, would you buy the only item that you were looking for? Probably no, you might be buying something else too. Cause' well you know that you won't be putting your hands in your pocket for doing so.

Exactly that's when you're tricked!

They challenge you psychologically, so strongly that sometimes you buy unnecessary things that you don't even need.

Wonder why?

Well you know, after processing all the information that was given to you, your brain almost assured you to buy it because that's not gonna cost you anything, at least for now. it's FREE OF COST (of course it is for the next 30 days)

That's what exactly happening in our country right now. Online festive season sale is on, they know you'll be loose on your pockets due to festivals and bang!! That's the time to lure you. No wonder you see their advertising on literally every possible platform, from radio to social media. They are everywhere to trick your brain!

Recipe for disaster!

You might not be surprised now if I tell you that is how a million-dollar industry of CREDIT CARD runs.

It's all in your brain, they just manipulate it for their use.

All the credit card companies want you to spend. If you do, they want you to do more!

You were given a credit card by your bank because you are their valuable customer.

You use your Credit Card wherever you go. You're given loyalty points for using it which again encourages you to swipe more. You feel privileged being their customer. Your dopamine level hits the sky when you get discounts at your favourite store just because you're having a CREDIT CARD of some bank/company.

But that is just the one side of it, let's look at the darker side.

You pay your credit card bill, say after 30 days when your income is due. A significant proportion of your income goes towards credit card billing and the remaining portion is not sufficient now. But no need to worry! You have credit, this time they increased your spending limit to make you spend more (cherry on cake, the perfect recipe for financial disaster). After all, you are a valuable customer, who always pay their bill on time.

So again you swipe it like a king.

Again shortage of funds because a significant portion of your income is used to pay for the credit that you spend IN THE PAST!

That vicious cycle goes on! And each time it becomes much more difficult to be stopped.

And say one fine day you failed to pay your credit card bill and what would happen? Well, it's time for your company now to earn from its privileged customer, they charge you interest at the unprivileged rate of 3% monthly (36% annualized).

Even if you never fail to pay the credit card bill, still you are trapped in that vicious cycle. Here's what you do exactly, you earn today to pay for the spendings you've done yesterday, how crazy it is!!

Remember our grandparents used to say first you earn then you spend. Guess they were talking about credit card culture (so visionary of them).

How to escape?

Let me conclude by saying that it's not at all bad having a credit card if you know when to use it & when not to.

I personally see Credit Cards as a knight in shining armour. I mean if I'm having a certain condition when I'm out of cash, I won't be needing anyone to ask for financial help. Well because I'm having a CREDIT. No finance tool except this one is gonna get you credit without interest so use it only when necessary. Keep it for the contingency purpose. But remember it is certainly not a good choice for frequent spending.

That's it from me.

See you on the other side of this story.