Is It Immoral to Make Credit Card Applications?

Credit cards are widely used all over the world. You can hardly find any country in which people do not use credit cards. Even in some slow developing third world countries of Latin America, Africa, Oceania and Asia credit cards are slowly integrating into the economy.

The convenience of going cash free is melting into the minds of people and changing their morale. While in the past debt was considered to be immoral, bad and was hardly tolerated by members of the society, now attitudes are changing in favor of credit debt.

Well, these are only words. In reality the situation does not look precisely as it is pictured in words. Yes, people in third world countries are becoming more broad minded. Yes, they are now more tolerable to the idea of taking a credit or a loan. Yes, some of them already have a credit card or even several cards. But... Does it really bring them benefits?

Unfortunately third world countries are treated by international banks and lending agencies as so called "Money Farms". These financial institutions plant there the seeds of loans and harvest interest rates and fees.

In India, for example, not properly educated and thus naive people are tempted by slogans such as "Make a credit card application now and get free 315 Rupees" or "Apply for a credit card and you will receive a golden collection of best music on 3 CDs". Only in India you will find credit cards aimed specially at women! They are cards that give rebates on buying jewelry. Marketing strategies are excellent and people swallow the gudgeon.

But do not make conclusions too quickly. Although interest rates are usually 30%-50% high and fees are quite heavy, it does not mean that Indians do not have opportunities to make good credit card deals. There are better credit card offers but they are not advertised and one should look for them thoroughly.

Cardholders who know about usual rates and fees in developed countries can only complain about current situation. Unfortunately they can do nothing because leading world banks such as Citi and HSBC together with main Indian banks such as Icici and HDFC dictate their rules. There are good reasons for this: lack of credit cards history in this country and lack of educational programs on this topic.

Of course there is the other side of the coin. Because of the low level of education in general and of financial topics in particular card holders in India do not read terms and conditions attentively. This usually results in late payment fees and overmaxed credit limits. This, naturally, increases banks' risks and they compensate through high interests and large late payment fees.

Although I do not consider a credit card debt shameful or immoral, I have never had a credit card. I prefer to burry my money in a metal tin under a palm tree (metaphorically). And when I take $100 they remain to be my $100 until I spend them. I do this not to accumulate credit card debt as many Indian cardholders do. Many of them have unmanageable credit card debt which they likely to be paying all their lives.

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