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Do you have debts? If you answer this question in negative only to realize that you have a credit card it clearly indicates how your mindset works. Many persons end up in financial problems simply because they treat credit cards as an expense. Rather, it is money owed to a third party.
The moment you start treating your credit card as debt, you will realize that it is the most expensive form of debt around. You probably pay more towards your credit card than towards your home loan repayment. The aggregate amount may be higher in case of the home loan repayment.
However, your repayment will bring down your principal amount owed a lot faster as compared to the credit card. Hence, when you compare the two, you will be paying higher interest charges towards your credit card as compared to all other loans.
Using the EMI option offered by home loan companies is not a bad idea. The initial phase may see bulk of your repayment being diverted towards interest payments. However, when you consider the savings you enjoy by owning your own house and comparing the same with the cost you pay, the equation works itself out and you end up gaining from the home loan transaction.
However, a credit card is used for day to day expenses. Eating out does not offer any benefit other than the sensation of a filled stomach for a few hours. Paying high interest charges to enjoy such a benefit does not make sense at all. Once you start looking at things from this perspective, you will stop using your credit card for frivolous purposes.
