Credit card pros and cons

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Credit card pros and cons

Credit cards can be both boon and bane in today's financial situation. If used well, credit cards can really provide loads of advantages and help in dealing with emergency financial needs. If used carelessly it can have consequences that are hard to deal with. Coping up with credit card problem is a challenge in itself, therefore using the credit cards wisely is very important.

Advantages of using credit cards:

Credit card holders can make use of the many advantages that credit cards offer, if they know how to manage the credit and take care of the bills. Some of the most important advantages are listed below:

  • The biggest advantage of using credit cards is the availability of a credit for any kind of financial need. Every credit card holder will have a set credit limit which can be utilized in full, whenever there is a need.
  • Travelling with credit cards become very easy, since it eliminates the need to carry heavy amounts of cash. Credit cards are convenient and easy to carry, and can be handy to use anywhere in the world.
  • Credit cards are accepted universally. There are places that may not accept checks, but credit cards are always accepted at any kind of store in any corner of the world. Having a credit card gives the advantage of spending power anywhere, anytime.
  • Credit card companies offer attractive reward schemes to their customers whenever they use credit card for their purchases. Cash back options, air mile reward schemes and many such reward schemes give back some profit to card holders for spending with credit cards.

Disadvantages of credit cards:

Although there are many advantages, there are some disadvantages too, which cannot be ignored when using the credit cards.

  • Using credit cards will always expose the card holder to the risk of debt. When the outstanding balance of credit card cannot be paid, it can accumulate into large debts which are difficult to handle.
  • Credit card companies charge high interest rates for outstanding balance which is not paid on time, which means that the card holder will pay more than what was purchased with the card.
  • There are security risks like identity thefts and credit card thefts, which may lead to unnecessary complications and unwanted procedures.
  • Credit card reward schemes and the general concept of credit availability encourages overspending, which may lead to bills that cannot be paid. Account holders must be very careful of controlling overspending when using the credit cards.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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