Nigeria Financial Info, Market Reports



CREDIT CARDS: FRIEND OR FOE

Credit cards can be a faithfull friend as well as a deadly foe. It depends on how you wield it.

Credit cards give you access to pre-approved loans/advances, depending on your credit limits. Basically, it is buy, now pay later.

You can pay off your balance at a go (and incure no interest charge), or pay off installmentally, to the delight of your bank manager.

Abuse of credit cards have brought many to grief abroad. Default in payment of your monthly bills have spawned a whole industry, that of debt recovery. Their job is to help the banks recover their money, for a fee. They will call you first thing in the morning, all through the day, and last thing at night. They will so harras you that you begin to dread the mere ring of a phone.

Credit card can come in very handy in solving temporary cash flow problems. But when it becomes a habit, then you have problems at hand. Some folks folks descend to the level of using credit card to buy groceries in the super market and fuel their cars. This efective means they are spending tomorrow's money to fund basic living expenses today. What happens when tomorrow comes?



If you cannot control your spending, giving you access to easy credit is like loosing a bull in a china shop. You will spend yourself to bankruptcy. For such people, financial advicers advise them to take a pair of scissors and cut their cerdit cards to pieces, and learn to use your debit card, that is, spend from your bank account, not loan pool, or better still, pretend you are a Nigerian, and pay cash. That should not be difficult for folks down here to do.

Credit cards can come in handy. There are many cases whereby it is better to pay for things with credit card, even if you have the cash. One case in point is paying for airline tickets, buying things abroad, or services rendered by a big organization. Normally, you are sent your credit card bills and asked to verify before the bank makes payment (well, I don't know if Nigerian banks have started doing that). If you buy an air ticket, and the airline goes out of business, or refuse to refund your money for whatever reason, instead of speaking plenty grammar into deaf ears, you can call your bank to stop payment for the service, or recover the money. They may not listen to you, but nobody messes with Visa and Mastercard. If a companies merchant account is terminated, they are in hot soup. If you had paid cash, you are on your own, but if you use Visa or Mastercard, they will be on their case, and you lose nothing. Basically, when you pay for things with credit card, you can get your money back if you are not happy. But if you pay cash, and the company has a funny returns policy, or zero as in most Nigerian shops, then you are covered by Visa or Mastercard.

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