New Delhi, May 24 -- A line of flexible, short-term borrowing, credit cards assist with tracking expenses, simplify payments and offer valuable benefits from banks and lenders, besides helping build your credit score. However, they are also among the personal finance tools with the highest interest rates and have a slew of additional charges and fees attached.

While it may seem like a straightforward financial decision, opening or closing a credit card impacts your credit score and can significantly affect your overall credit profile. It is thus important to have a good idea of the full costs and risks involved, especially in cases where the annual fees exceed the benefits or payoffs (cash back, vouchers, gifts, convenience, etc.).

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