Pros and cons of credit cards
Credit cards are often considered to be a very tricky method of payment, since many people get too relaxed when the use them and they do not track their expenses regularly. It also happens when they use too many credit cards, so they lose track how much was spent on which of them. However, if you use credit cards responsibly, they can be a great method of payment and ideal financial tool for all your needs.
Just like any other method of payment, they have their advantages and disadvantages. When it comes to their advantages, there certainly are many of them. First of all, with credit cards you are able to purchase everywhere, both in your country and all overseas. Credit cards such as American Express, Visa and Master Card are accepted all over the world, so you need not worry about making purchases or booking flights or accommodation in other countries. They increase and expand your purchasing power, because they are not only used for paying directly at the place of purchase, but you can also use them to pay online or over the phone.
When you make purchases by credit cards, you are allowed to pay in monthly installments, which makes the purchase much easier and more comfortable. Not only can you repay credit card debt in instalments, but if you repay the debt regularly, there is another benefit – you can build up your credit history and thus raise your credit rating. Some credit cards also have the possibility of collecting point with every purchase, and after collecting a certain amount of points, you can get valuable prizes, such as various discounts or even free airplane tickets.
When it comes to disadvantages of credit cards, there are not so many of them, but there still are some, and they are more dependent on the way the card is used than on the card itself. If they are used irresponsibly and unwisely, they can have certain disadvantages. If you default on the credit card debt repayment, there will be late fees and high interest you will need to pay in addition to the debt, which can altogether be quite expensive.
When you acquire credit card debt which is too high, it can also harm your credit rating. Then, if you use a large number of credit cards, it can be difficult to track your spending, and it is not very welcome in the eyes of lenders. If you do not feel comfortable spending more money than you actually have, then having a credit card may also be a disadvantage for you rather than a convenience. Lastly, another disadvantage of credit cards is that they can be lost or stolen, which can cause a number of problems, and credit card fraud may pose a lot of debt on the original user.
If you are considering applying for a credit card, make sure to check all the conditions of the deal and choose the deal that suits you best. If you use the card responsibly, repay the debt on time, keep track of the expenses and keep the card safe, it should provide you with a range of benefits and it can provide you a positive experience rather than inconvenience.