Listed below are some pros and cons of credit card:
These days’ people tend to carry credit cards instead of cash whenever they are going out as it is an easy medium to do the payment. There are people who love credit cards and people who hate them. Using a credit card can definitely make a life of people easier, but the spender can go under a huge debt if the credit card is misused. Hence, the pros and cons of credit card must be considered to make sure that you can get many benefits from that plastic card.
The Pros of Credit Cards:
- Faster to use
In comparison to cash and especially when you need to write a check, credit cards are much faster to use (Also Read). You can just swipe your card and your transaction is completed in seconds.
- More purchasing options
With the help of credit cards, you can do your basic shopping over the phone, through the internet, or in person. However, with cash, you are limited to in-person purchases unless you purchase money orders.
- Credit card offers rewards
You can earn rewards from the use of credit cards that can further be used for cash, gift cards, miles, or other merchandise. The more you use the more rewards you earn.
- Ability to pay in installment
You have the ability to pay off your balance in a particular period of time although it’s best to pay your credit card balance in full each month.
- No need to carry cash
These days the majority of places accept credit cards, which means you don’t have to carry bundles of cash or also need to stop by any ATM to pull out cash before going out.
- No loss of funds after fraudulent purchases
In case your credit card is stolen and, the thief has the ability to drain all the money, but can report it to the bank and wait for the bank to process your fraud report and replace the funds. Though you may have to wait for the card issuer to clear up the fraud, you still have access to your main source of funding in the meantime.[Further Reading]
The Cons of Credit Cards
- Terms and conditions can be confusing
For some people, the terms and conditions that need to be fulfilled before issuing a credit card can be confusing as they may not be used to reading credit card agreements. Understanding credit card terms are very important before using the credit card so that you don’t put yourself at risk of fees.
- Fees and interest can be expensive
Depending on the use of credit cards, your credit can cost hundreds of dollars over the course of a year. This is the reason why you must understand the credit card terms.
- The temptation to spend more money
Credit cards open up additional purchasing power and you have the feeling that you have more money than you really do. Many people are willing to spend more with credit cards than other forms of payment (also read).
- Misuse can ruin your credit score
Your credit score depends on how you use your credit card. In case you pay your credit card balance late or you run up big balances, your credit score will be impacted.
So, these are the Pros and Cons of Credit Card. If you love to explore more topics, you can request and contact us.