In a recent interview with MintGenie, Raj Khosla, Founder & MD of MyMoneyMantra, shared valuable insights on how young individuals can effectively manage their credit to maximize the benefits of credit cards and other debt products. One common trend among millennials and Gen Zs is taking loans to fund extravagant weddings, driven by societal pressures and the desire for a grand celebration.
Khosla emphasized the importance of considering the long-term financial implications before taking such loans. He advised setting a realistic budget to avoid hefty EMI repayments and ensuring that loan terms, including interest rates and repayment tenure, are carefully evaluated. Additionally, individuals should define their future financial goals to maintain stability and avoid falling into a debt trap.
Moreover, Khosla addressed the issue of Gen Zs taking EMIs for non-essential purchases, leading to a cycle of debt. He highlighted the need to understand borrowing costs, differentiate between needs and wants, and maintain financial stability to avoid financial distress.
When it comes to choosing a credit card, Khosla recommended assessing fees, rewards, interest rates, credit limits, and added perks to align with individual needs and preferences. He also provided valuable advice for existing cardholders facing changes in benefits or increased fees, suggesting reevaluation of cards, negotiation with lenders, and optimized card usage.
Lastly, Khosla emphasized the importance of secured credit cards for individuals with limited access to unsecured credit, as they provide a pathway to building credit history and cultivating responsible credit habits. He urged banks and financial institutions to promote secured credit cards more aggressively to foster financial inclusion and expand the customer base.