Is it a good idea to buy a credit card?
Finance
With Indian spending behaviour drastically changed in the last 5 years, today we deep dive into the pros and cons of credit cards and other few things we agree in Terms & Conditions* without truly knowing about them.
Why you should own a credit card?
Payment buffer: Credit cards work on a revolving cycle of payments, allowing payments later than the actual date of transaction, providing an extra month to manage liquidity
Rewards: Companies often incentivise consumers by giving them points for their transactions, often providing cashback and goodies. Most providers also have lounge accesses at airports.
Payment assistance: Low-interest rate EMIs/No cost EMIs can help with big purchases and help one with easing out the payment process instead of one big downpayment.
Credit score: Credit card is one of the best ways to boost one’s credit score. A high credit score can help one with better loan sanctions, often lower interest rates and to conclude, better offers on loans.
Using around 10-20% of your credit card limit and making payments before the due date can really help with the credit score.
What’s wrong with owning a credit card?
It isn't technically wrong with owning a credit card, however, there are few things one must be wary about.
Promotes spending behaviour: Owning a credit card can often result in individuals spending more than they should. The faux feeling of money not actually being debited- often results in more purchases than one realises. You know it, you’ve been there!
Late fees: If you miss your due date, you are subject to an interest rate of up to 30-40% per year, along with some flags in your credit score. Although companies provide a minimum 5% amount to levy late fee charges, the interest rate on the remaining amount could still break the bank!
Bad interest on cash withdrawal: Unless specified otherwise, cash withdrawals are charged from day 1 by credit card companies. Effectively, taking a personal loan serves better than the interest rate of the credit card.
To summarise
Treat your credit card like your debit card, don’t fall for the debt trap. Only take a credit card if you can pay the bill in full and on time before the due date. One late payment takes months to recover on the credit score. Download credit card management applications like CRED as reminders for timely payment.
Zero charge credit cards, cashback and rewards are all great, but don't let a rectangular piece of carbon change your spending behaviour.
What’s happening in Cuba?
Global Politics
On July 4, 2021, thousands of protesters took to the streets in Havana to protest against the government’s handling of the pandemic, shortage of basic medicine and food supply, frequent blackouts, and the crippling economy.
The protestors shouted for freedom on the streets and asked President Miguel Diaz-Canel to step down immediately. In a country where public dissent is tightly restricted, these protests are being called the biggest demonstration in the country in the last three decades.
What went wrong?
Apart from the effects of the pandemic, Cuba has also suffered due to severe economic sanctions imposed by the administration of former US President Donald Trump in 2017. Tourism, which is a major source of income for the country, has also suffered. The year 2020 saw the country’s economy shrink by 11%.
Then and now
Cuba is an authoritarian communist state that has been under the single-party rule since its 1959 revolution. Traditionally, the Taxi industry is one of the only sectors where private activity has been allowed. Everything else has remained state-owned.
In February 2021, Cuba announced that it will allow private businesses to operate in most sectors of the national economy, enabling the authorised industries to grow from 127 to over 2,000. However, the full impact of these long-overdue reforms is yet to show in the country.
Pandemic effects
On 11 July 2021, Cuba reported 6,923 Covid-19 cases and 47 deaths, double of what was recorded the previous week, although many opposition groups say the true figures are likely to be much higher.
While the government announced that its homegrown vaccine called Soberana (Sovereign) was about 91 percent effective against symptomatic patients, the country faces a shortage of vaccines as it has not imported any other Covid vaccines.
Curbing the protest
Around 150 people were arrested after the biggest wave of protests in various cities on 11 July 2021. Only 12 were confirmed to be released so far according to exile rights group Cubalex.
Amnesty International said it had received with alarm, reports of "internet blackouts, arbitrary arrests, excessive use of force – including police firing on demonstrators”.
Jose Daniel, the leader of Cuba's largest opposition group, the Patriotic Union of Cuba (UNPACU), was arrested along with other prominent members of the opposition.
Internet blackout
The introduction of mobile internet two years ago gave Cubans a platform to express their frustrations, thus enabling the protests in Cuba. However, Cuban authorities have now shut down internet access in an effort to stifle protests.
NetBlocks, a London-based global internet monitoring firm reported that Cuba had restricted access to social media and messaging platforms including Facebook Instagram, WhatsApp and Telegram since July 12, 2021.
President Miguel Diaz-Canel: “Blame the US”
President Diaz-Canel said that protesters have been manipulated by US-orchestrated social media campaigns.
Mexican President Andres Manuel Lopez, on July 12, 2021, stated that the tough situation in Cuba was mainly due to the US economic embargo against the country.
Russia’s Foreign Ministry spokeswoman Maria Zakharova said it was unacceptable for there to be external interference in Cuba, a statement that was directed towards the USA. She also expressed faith in the Cuban’s government’s capability of handling the situation.
US responds
U.S President Joe Biden said the United States stood with the people of Cuba who were bravely asserting their right to peaceful protest.
U.S Secretary of State Antony Blinken said that Cuban officials should not blame the protests on U.S sanctions and instead, try to understand the problem of the people. Even though Biden had vowed to ease some of the measures against Cuba, he is yet to do so.
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