Using Credit Cards: Pros and Cons

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Using Credit Cards: Pros and Cons

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There are some people who always deal in cash. There are others who use their card more often and use very less cash. Both methods have their own advantages and risks. In the longer run, it is about how risk averse a person is or how careful a person is about expenses that decides what mode of payment a person prefers.

There are quite a few benefits to using credit cards. The first one is one doesn`t need to have cash to make a purchase, go to a hotel or make any other transaction. Often in places where finding an ATM is a problem, this could be a real time saver. Also it is not really convenient to carry large sums of money when a simple card can do the trick. The second benefit is that one can do online shopping only with cards and not cash. Given the large number of deals and marketing promotions that are being done these days, one would be missing on a lot of offers if they do not go for online shopping.

Although online shopping is possible with debit cards too, credit cards are safer firstly because of more security and protection measures present in them and secondly because debit cards lead to immediate transfer of money and hence more frauds. In case of credit cards you can deny payment for fraudulent charges under the zero liability feature. It is generally difficult to get the money that has been paid back in case of a debit card.

Using a credit card is also advantageous when one doesn`t know how much money is required. This is true when one visits a new restaurant or a shopping mall for purchases. Some credit card holders can avail discounts too by using credit cards.

There are a few benefits for those who use cash and stay away from credit cards. Firstly, one doesn`t have to pay service charge, hidden fees etc. if they are not using a credit card. Secondly, one always spends within limits in case of cash. This is good for maintaining budget. Thirdly, since there are no offers, the chances of getting lured to make unnecessary purchases are very less. However, a major problem with spending cash is unlike in case of card you don`t have a history of where you spent. Secondly, you cannot build a credit history by using cash instead of a credit card.

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