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Credit cards can unlock worlds of opportunity, allowing people to buy things they want with just a swipe of plastic.

But convenience can come at a steep price, especially when careless cardholders spend more than they earn and find themselves deep in debt.

The issue took a more sinister turn last week when a politician died inside a Citibank office in Jakarta while being confronted by debt collectors reportedly hired by the lender.

Irzen Octa, 50, the secretary general of the National Unifying Party (PPB), reportedly racked up credit-card debts worth Rp 68 million ($7,900) and was unable to pay back a loan of Rp 100 million.

A police autopsy concluded that Irzen died from a ruptured blood vessel in his brain, but several investigators suspected foul play when blood stains were found on the walls and curtains of the Citibank private office where he died. The investigation is still ongoing.

The incident has prompted inevitable questions about banks’ credit-card policies and debt collection methods, and has raised alarm about how serious credit-card debt can be.

Umar (not his real name) works for a multinational bank in Jakarta, where his job entails approving credit card applications. He says part of the debt trap is unregulated credit-card issuance.

He says many lenders are increasingly aggressive over pushing plastic on clients, especially in cosmopolitan areas where credit card use tends to be high. Banks are also optimistic about the health of the economy and consumer spending.

No longer the enclave of the extremely rich in Indonesia, banks are now offering cards to middle-class consumers, typically by setting up sales booths at popular malls and shopping centers.

Umar says banks see great profit in the interest they charge for giving people generous lines of credit.

But when pushed to meet certain quotas, Umar said, irresponsible bank officers sometimes ignore standard procedures and hand out cards to clients who do not meet requirements.

Rafael (not his real name), another worker at a major bank, says banks have existing regulations that require them to check clients’ financial status before approving their applications. Their ability to pay determines their credit limit.

Rafael says banks should approve the application if the client can pay off at least 30 percent of their monthly bill. “But I have seen many banks granting people credit cards with limits far larger than the borrower can realistically hope to pay back,” he said.

Umar said many clients also failed to use their cards properly. A common mistake is to think that they don’t need to pay interest as long as they pay the minimum monthly payment on their credit card bills. “That’s completely wrong,” Umar says, adding that banks would still charge interest whenever a loan was not yet paid in full.

To avoid such problems, Umar says, a credit-card holder would be advised to pay off the full amount outstanding each month.

Plenty of users also use their cards on things they don’t really need. Ramdani Prakoso, a marketing worker, says he has learned the pitfalls of seemingly guilt-free spending the hard way.

He decided to dump his card two years ago after he faced mounting debts of up to Rp 12 million ($1,400) a month.

It took him one and a half years to pay off the debt. Now, he says, he only buys things that he actually has enough money in his bank account to pay for.

Vina, a bank promoter, works closely with merchants such as restaurants and stores to create attractive packages for the banks’ credit-card holders. She says the real goal of all of the campaigns was to push people to buy more things, then worry about the bills later.

“Most of the promotions I design can only be enjoyed if you charge a lot of money to your card. So we are really encouraging clients to spend,” she says.

But Vina is quick to point out that the problem of debt should not be solely blamed on banks. “Credit card holders are adults who are responsible for their actions, including the things they buy with their cards,” she says.

However, Ferdina Siregar, a financial planner at Akbar’s Financial Check Up, a financial services company, says people generally misuse their cards.

“The basic function of a credit card is to replace cash,” she says. “But most people end up using them like a personal loan service.”

With monthly interest running at an average of about 3 to 3.5 percent — equivalent to 36 percent to 42 percent per year — credit cards might be the worst way to get a loan, Ferdina warns. “Imagine if you buy a mobile phone worth Rp 4 million on your credit card. While the value of your phone keeps decreasing, you still have to pay interest on it.”

Umar says ignorance is the biggest enemy of credit card users. Too often, he says, he has had to deal with people who walk away from their debts because they don’t have enough money to repay banks. These errant clients mistakenly hope that time will magically erase their debt.

Umar says poor money management and spending habits may have been what caused Irzen’s massive debt.

“To ignore your credit card loan for a long time is very dangerous, because your interest will keep multiplying,” he said.

Umar outlined a scenario to illustrate what happens when you don’t pay off your credit card bill. “Let’s say you’ve charged Rp 10 million to your credit card, and your card has a 10 percent monthly interest rate, requiring you to pay an additional Rp 1 million after the first month. Many people assume that they have to pay the same amount of interest the second month, which is completely wrong.

“In the second month, you would actually have to pay Rp 1.1 million in interest, since the bank charges the 10 percent rate to Rp 11 million, which is your initial debt plus one month’s interest.

“In the third month, the additional interest would be Rp 1.21 million. This is what is known as compound interest.”

With compound interest, debt balloons at an exponential rate. If you ignore it, the numbers will add up quickly.

Umar says interest calculation schemes can be different between banks, and many credit card users don’t fully understand the exact formula their bank is using.

He encourages credit card holders to talk to bank representatives immediately if they do not understand any aspect of their billing statement.

Although people should be careful with their credit card use, Ferdina says, people should not be scared to use them. “As long as you pay your bills on time and only buy things that you know you can pay for later, then you’ll be fine.”

If someone is unable to pay their bill in full, Ferdina suggests, they should attempt to renegotiate with their bank and get an easier payment plan.

Another crucial way to avoid trouble, she says, is to avoid getting addicted to purchasing with plastic. “If you already have one credit card, think carefully before applying for another one.”