Credit cards are life savers. We use them to pay a wide array of expenses in our everyday life. These include from big purchases valued in large amounts of money and probably expected to be paid in installments for a couple of years, to daily small purchases made in one payment, just because it’s more convenient or we do not have cash at the moment of the purchase. That is to say, from buying a new television or fridge for our home, to paying for a supermarket purchase. There are many other cases, for instance applying for a personal loan and attaching it to a credit card payment. People also tend to set up automatic monthly payments by credit card to services such as television apps (like Netflix or HBO), telephone contracts, gym memberships, and basic services such as electricity or water fees. These last automatic paid wages are extended without really becoming aware when that it is being done.
Being the owner of a credit card connected to a bank has many benefits, says Experian. To start with, they are a widely accepted payment method all over the world. Also, you could get insurance coverage from your credit card. They are an easy way to pay when traveling around, and you do not need to carry money around. Moreover, if used wisely they improve people’s credit scores.
In the same way, on the other hand, there are also a number of perils that can be mentioned. One of them is keeping track of what we spend, and accordingly keeping track of how much of that debt we are actually able to pay. There is a saying that goes like this: “knowledge is power”, in this case it firmly applies and it could be restated as “knowledge is money”. There are some aspects to be taken into account to be a wise consumer who is aware of his or her expenses.
It looks like, nowadays, some banks do not respect the legal limitations they are entitled to. Some of them continue to collect debts which have already expired and consumers happen to be paying them because of that lack of data about their financial and legal situation. One piece of information that every user of a credit card should know is the existence of the Prescription Act 68 of 1969 which was drafted “to consolidate and amend the laws relating to prescription”. This piece of legislation states that after the passing of the prescribed period of time, the liability to pay expires. There are a number of things to take into account, one of them is, for example, never acknowledging the liability to pay. More can be read and researched, and there are also legal advisors who provide guidance and assistance in order to follow the right course of action.
All in all, it seems the problem is only a matter of knowledge. Credit card holders need to be aware of their rights and obligations as consumers in order to pay only what they have to. There are more advantages than disadvantages when owning a credit card and they should not be wasted, but considered an asset.