Wednesday, 10 July 2013

The Pros and Cons of Using a Credit Card

Posted by Amy :)


Even if the current economy is inconsistent and unpredictable the numbers of credit card users have increased considerably over the years. Credit cards come with high interest fees but yet there are several benefits and advantages that make owning a credit card worthy. However it completely rests on the user whether he should use his credit card for the good or for the bad. If utilized cleverly, credit card can indeed help you more in saving money than spending it.

There are several benefits and drawbacks of using a credit card and in a time where an economic crisis or a phase of inflation can land upon u

s at any moment, you must make sure that your credit card doesn't create unnecessary troubles for you. Here in this article we will talk about the numerous advantages and disadvantages of credit cards so that you can you can make the most from your card and avoid misuse of the same.

Credit Card Benefits

Improved Buying Power: An chief benefit of credit card is its ability to improve your shopping experience. You can avoid carrying large amount of cash which is considered unsafe and use your credit card while shopping instead.

Safe Transaction: Transactions with credit card is considered to safe in comparison to cash transaction. Credit card companies offer several advantages on stolen and lost things that were bought using a credit card and some credit card firms even offer insurance on purchases.

Best during Emergencies: Credit card can be extremely handy during emergencies. No one knows about the future and accidents and mishaps can happen at any given time and what could be worse is the shortage of money during such moments. But with credit cards you can reduce the risk of monetary shortages during such crucial times. 

Other advantages: Credit cards can offer additional benefits such as discounts on purchases, benefits in online shopping, free miles on road and airlines, EMI facilities, etc. These benefits can indeed be helpful if you use your credit card wisely.

Credit Card Disadvantages:

Increased Expenses: And important thing that a credit card user must realize is that whenever he shops he is paying money that he literally doesn't possess. A credit card can make its owner feel richer and therefore he shops more than normal and buys things unnecessarily. This often leads to increased expenses which finally cause more debt to the card owner.

High Interest Rates: Now after you buy an expensive item using a credit card you will have to pay it back to the card issuer and he will charge you with interest that are often much higher than you could imagine. Further if you fail to pay or delay your payments the interest rate will increase further. This is a major drawback of using a credit card since you will have to pay more for the things you buy.

Fraud and Scams: Credit card frauds and scams often occur to their owners and if you do not handle it properly it can be stolen and misused. This can cause a major headache for the card owner but if reported on time much of the troubles associated with credit card theft can be evaded.

Author Bio: I am William a finance blogger, freelancer and copyright editor from NY. Check out my site at economicrisis.com