A credit card may sound beneficial, one with lot of perks and offers, but can turn disastrous if there is no proper financial planning as it has been the case with most of the youngsters today. They are seeped in debt owing to overuse or rather `abuse’ of credit cards.

When Chinmay Pillay, a Sales Manager with a private firm was asked about this, he said, ”It is a tool that can easily land you into debt.” If not used cautiously credit cards can get you into huge troubles. “Credit cards give us huge liberties in spending and we go out shopping beyond our limits. But, only when we receive the monthly bills do we realise that we have spent more than what we can afford,” he adds. Most of the credit card owners end up converting their monthly dues to EMIs, paying heavily in interest. This has forced many to stop using credit cards, he says.

But, not using credit cards can also put a hole in your pocket. Each month, the banks charge a minimum amount due and even failing to pay that will result in late payment charges and interest. P Selva Ganapathy, a techie said, “Knowing the risks of using credit card, I didn’t make any transactions in it. But, only later I realised that I will be charged even if I don’t use the card,” he said. He had to pay Rs 10,000 since the bank linked an insurance policy with his credit card, without his knowledge. ”The bank has linked a insurance policy with my credit card, and every month Rs 1000 was getting credited from my the card. I wasn’t aware of this, only later did I come to know about this.” He said that despite paying the amount now, his CIBIL score is negative, thereby making it difficult to take loans.

Thirunavakarasu, an equity analyst at M3 Money Manager, says it is always advisable not to use credit cards. “Credit cards have highest tax rate and interest rates in the country. Also, most banks make unnecessary card charges and debit charges and these are not under the user’s control,” he points out. The only benefit a credit card holder may get is getting free access in airports depending upon whether he is a gold, silver or platinum card user. “It is always safe to use debit cards, “ he adds.