18 Dec, 2023

Credit Card Magic: Explaining my Kid all about it!

Imagine your dad has a special card called a "Kharcha Card," with a tiny mountain painted on it like the one that is seen from our house. It's like having a stash of money stored inside, but you can't see them.  When your dad needs to buy something like a shiny gadget or a warm cloth for you at Bhatbhateni, I show the Kharcha Card to the shopkeeper. It remembers how much I spent, just like you count and keep small pebbles in your pocket! 

Now, as your dad works hard every month, he uses some of his own rupees to refill the magic stash inside the Kharcha Card. This way, the Kharcha Card is always ready for the next special purchase. Using the Kharcha Card wisely, like buying your school supplies or helping your grandmother at the Bhatbhateni, earns your dad a “good man card” – like a report card showing how responsible your dad is with his money.

 4 Advantages of the Kharcha Card

  1. Super Convenient: No need to carry cash like you carry in your small pocket or worry about losing them when you play. Just a tap of the Kharcha Card and you're good to go!
  2. Safe and Secure: Unlike cash that can get lost, the Kharcha Card keeps your money safe– just like the small treasures you hide in our backyard!
  3. Smart Tracking: No more counting cash like you do! The Kharcha Card remembers how much you spend, making it easy to keep track of purchases for your dad.
  4. Good Habits, Good Report: Using the Kharcha Card wisely and helping your family members buy things at Bhatbhateni builds a “good man report” for your dad! This shows everyone that your dad is responsible with money.

4 Disadvantages of the Kharcha Card:

  1. Not for Everything: Remember, the Kharcha Card is like a special friend, not a money printing machine! We only need to use it for important things that we absolutely need.
  2. Easy to Forget: You might also forget you have to pay the amount back after the end of the month, like you forget to show the report card from school, so you need to be careful. Else, you have to pay heavy interest.
  3. Temptation Trap: Sometimes, yummy ice-cream that you like or sparkly toys at Bhatbhateni might whisper, "Use the Kharcha Card!" and you might make us use it. But we should be strong – we should only use it when we need things we absolutely need.
  4. Not Magic Money: The Kharcha Card needs me or your mum to refill it with our own money, just like you refill your magic pen after you finish the ink. So, we should always use it wisely!

How to get a Kharcha Card(Credit Card) in Nepal?

You have a piggy bank where you keep your special coins and maybe even some paper money, right? Well, a credit card is like a grown-up's piggy bank. Instead of coins, it has a special kind of money called credit. Your dad is allowed to borrow money from the bank just like you always borrow my phone to play games and then return it later to me.

But to get a credit card, you have to show to the bank that you are responsible and can pay them back with interest. Here’s the requirement to get credit card in Nepal:

  • You should be any Nepalese citizen with age of 18+ years and above.
  • Your salary income proof ( for salaried)
  • Your business income proof ( for business)

But remember, you have to pay back the borrowed money from the bank. You do this each month with your own money, the money that you will earn when you grow up. So, a credit card is like a grown-up's piggy bank that lets you borrow money from the bank to spend it on your required things, but you have to be responsible and pay it back to get that “good man report” that lets you keep using it!

What will you need to show the people at the bank to give you the Kharcha Card?

But to get this magic Kharcha Card, you need to show the bank you're responsible, just like you wouldn't let someone borrow your favourite toy if you knew they wouldn't give it back. So, the bank asks for a few things:

  • Your ID: Just like you need to show your gatekeeper who you are in school, the bank needs to know who you are too! They like to see your citizenship certificate, which is like your official grown-up ID card you get when you reach 16 years!
  • Your picture: They also want to remember your face, just like your friends do! So, you give them a recent picture, like the one I took for your school ID.
  • Proof you can pay back the borrowed money:  Imagine your friend borrows your favourite toy but doesn't give you back later with a thank you, Not fair, right? The bank doesn't want that either, so they need to see proof that you have money, like your allowance. For grown-ups, this can be papers from their work or their business, showing how much money they earn.

Do you understand now? I will tell you more in our next session. Remember, Kharcha Card is a good friend if you treat it well and can be your worst enemy if you dont treat it well!