Ganesh Komma breaks down why credit card rewards don't pay off for most people. Forty percent of users carry balances at 36%+ APR while earning just 2-5% back. Switching to debit or UPI cuts spending by 15% without the interest trap.
Do you use credit cards for points, cashback, and air miles. You are playing a game designed for you to eventually lose because they know 40% of the users don't pay full bills on time. The interest they earn, which is around 36% plus on an annualized basis, dwarfs the 2 to 5 percentage rewards they give you. If you pay 100% on time, then you win, but most don't do that. A better hack Use a debit card or a UPI for your daily spends. You will spend 15 percentage less. Unconsciously. Use credit cards only for planned big purchases, with EMI at 0 percentage. To learn more, follow us.
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