credit card
Credit Card: In today’s era, credit card is not just a piece of plastic but has become an important part of our lifestyle. Coming out of the glitz of metro cities, this facility has now made its way to Tier-2 and Tier-3 cities as well. Whether you want to do online shopping, pay electricity bill or order monthly ration, credit card has made our life very easy. The convenience of ‘buy now and pay later’ along with cashback and reward points makes people crazy about it. But, this attraction sometimes becomes the cause of a mistake, the consequences of which you may have to suffer for a long time. That mistake is sharing your credit card with others.
You can come on the radar of Income Tax Department
with others credit card The biggest and invisible disadvantage of sharing is related to income tax. Today’s banking system and the monitoring system of the tax department have become smarter and hi-tech than ever before. Banks now send reports of big transactions directly to the tax department.
Just imagine, if your annual income is Rs 5 lakh, but Rs 6 or 7 lakh are being spent on your credit card in a year, then this can directly offend the tax authorities. Even if you have spent that money for your friend or relative, the department will question you as to where the money came from to spend more than your income. In such a situation, you may have to face a notice and it may prove costly to account for every penny.
Can get trapped in debt burden
Relationships and friendships have their place, but financial discipline has its place. When you give your card to someone else, they may be responsible for the expenses, but in the eyes of the bank, the liability is yours alone. Suppose, you gave the card to an acquaintance and he could not pay the bill on time or the EMI bounced, then you will be in trouble.
The interest charged on credit cards is not simple. If payment is not made on time, you may have to pay 30 to 40 percent interest annually. This financial burden can drain your savings and trap you in unnecessary debt.
Dreams may be eclipsed
Proper use of credit card improves your ‘CIBIL Score’, but a small mistake can send it into the abyss. When your card payments are not made on time, your credit score drops rapidly.
Once the CIBIL score gets spoiled, then in future when you need a home loan, car loan or personal loan for your needs, the bank may refuse to give you the loan. That is, the joy of others’ shopping can shatter your dreams of owning a house or a car.
Also read- Fraud is being done by pretending to increase credit card limit, be careful like this