Credit Card - Why or why not?

"From what I heard about it, I am never going to get a credit card for myself", said a colleague. I remembered having the exact same thoughts a few year ago.
So, what is this that make us apprehensive about the credit card ownership?

Easy credit availability and excessive rates of interest in such a manner that the user can go bankrupt.
It is not that simple. Read on to find out.

A credit card have a lot to offer to the users. There is no trap by the banks. However, some users do not try to understand the basic Terms and Conditions and fall under huge debt.

It offers interest free credit for 30-50 days (depends on card). So, its interest free, what's the problem?
Let's say a statement cycle is from 1st to last day of a month. The statement for expenditure is generated on 1st February for period 01 Jan to 31 Jan. The due date for payment is, say, 10th Feb.
So, for expenditure on 1 Jan, you pay on 10 Feb, i.e. after 40 days. And for expenditure on 31 Jan, you get 10 days interest free period. It's great when you don't have to pay any interest on it.

The credit card statement will require you to pay a minimum of 5% of the bill by the due date. This is where the problem starts. Every month, the bank will need you to pay a minimum of 5% of bill only. If you've spent Rs. 10,000/-, you'll need to pay a minimum of Rs 500/- only. The rest 95% i.e. Rs 9,500/- goes to interest bearing credit and the interest rate can be as high as 40% p.a. or more. This amount can accumulate over the period and a huge debt can be created.
Any partial payment to the card bill makes the credit interest bearing. And once the card has this interest bearing balance, all further transactions becomes interest bearing from the date of transaction itself.
So, NEVER ever pay 5% minimum due. As far as possible pay the full bill on or before the due date.

Pros:
1. Interest free credit for the month. You can park your salary elsewhere to earn interest for a month.
2. Reward points which is equivalent to cash back of 1% to 3% or may be more depending on the card.
3. Other benefits may include complimentary Airport Lounge Access (which have further T&Cs), discounts on using cards at specific websites/ restaurants/ showrooms. We know of card specific discounts given by shopping websites like Amazon, Flipkart, Snapdeal time to time.

Cons:
It might make us susceptible to making purchases which are not required.
There are no cons if you use it wisely and understand it's T&Cs.

Fees & Charges associated with the cards:
1. Issuance Charges: These vary a lot with different card types and with bank to bank. This starts from ZERO. Even when the bank's website mentions it as some amount, you may actually get it at Zero charges. All depends on your profile and CIBIL Score.
2. Annual Charges: The case is same as that of Issuance charges. Even the cards with Rs 1,000/- annual fee are offered as Lifetime Free to some customers.
3. Under normal use, we do not have to incur any other charges. Pay dues on time - no interest.
4. Never withdraw cash from ATMs using Credit Card. The charges are very high for that. CCs are meant to be used at Point of Sales (PoS) where the credit card company can get their commissions & share them with us in form of interest free credit and reward points.
5. The bills if paid by cash might attract some charges. The bills can easily be paid online via netbanking, NEFT, etc without any charges.