Is a credit card a helper or does it make a hole in the bag?


(Image source: Image by Mediamodifier from Pixabay)

Making payments in this day and age has become easier with credit cards, paylaters and e-wallets. With the ease of transactions using credit cards, the number of credit card transactions in Indonesia was recorded to have increased 9.53 percent from Rp 151.49 trillion to Rp 166.07 trillion from Bank Indonesia's payment system statistics.

"Using a credit card is useful for emergency funds beyond my ability, so it's easier to manage the monthly fees," said Fitri, a Compliance and Risk Manager.

"Credit cards are very useful when I travel abroad," said Ergy, an HR Manager profession.

It's different with Ben, Support Manager at a startup in Jakarta, "In the past, using a CC (Credit Card) was useful, because every swipe there was no charge, but now it's actually being charged. Especially now the installments have increased by 6 percent, if I The charge for the fine that I have to pay is already too big, all I have to do is just dig a hole to cover the hole".

On the one hand, Brilio's survey with Jakpat, explained that 44 percent of the reason millennials use credit cards are because there are discounts or cashbacks, they try to minimize spending by relying on the promos provided. As many as 38 percent of millennials prefer to use CC for their emergency funds, for example, such as the cost of hospitalization. There are 16 percent of data showing CC is more practical for those who are cashless. Then, the remaining 1 percent is only because of social status.

In addition, there are 44 percent of the reasons millennials do not use CC because its practicality will actually make them wasteful. 17 percent of them are not because they don't want to use CC, but because they have not been approved by the bank. Then, 28 percent of them feel that using CC can potentially get into debt. And the remaining 11 percent are afraid because the interest given by CC is too high.

How Do Credit Cards Work?

Credit Card (CC) makes it easy for you to transact by using credit from the bank, of course according to the limit and time period that has been set. The credit limit that you can use is set by the bank. Generally, the limit is seen from how much your salary is per month, so when applying for CC you need a payslip.

Meanwhile, the time period is given for one month for each date you have set, for example on the 3rd or 28th the bill will come out and the due date can be around 5 days. So, this CC is a tool to help you make transactions in the short term which is an obligation for you to pay.

Hence, the system of using CC is actually easy. As long as you pay off on time and avoid high credit balances, CC can be a helper for you in money matters. But if your CC swells especially if it's past its maturity date, it will be a knife for you because you have to pay a pre-determined fine.

It should be underlined that using CC is not wrong, as long as you can pay off the bill every month. For example, if you pay in installments on a motorbike for Rp. 30 million, you can pay about 1.5 million in installments per month. Well, as long as you are able to pay it before the due date, you will not be subject to a fine.

But of course it will be a problem if you use CC but it's too late to pay off. Just imagine the fine you bear, based on data from several national banks, the late payment fee is 3 percent of your total monthly bill. Of course it will be a money trap without you knowing it!

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