Credit Cards : Pros and Cons

A few months back I got myself a credit card the easiest & most flexible way to borrow money & buy items. All that I did was sign up for a credit card , sign my name on the back of the card and I was ready to go. I was elated at first to own the immense flexibility of a credit card in my pocket; but soon enough I found out that having a flexible avenue for gratifying my urge to buy was not a good idea at all . Within weeks I realised that I was spending on things that were beyond my budget and before I could restrict myself I was in knee deep debt. I am still paying the debt I incurred in the first month of getting a credit card , the interest rates are going up as well .

I decided it was time for me to do some research on the hassels of credit cards ; and to be frank I came up with a long list of data regarding Credit cards and their effect on American household finances. So I am going to enumerate some of the advantages and disadvantages of credit cards to clear the air on this issue.

Some pros of Credit cards:-

• Credit Cards are Convenient to carry and use
• Cards are a Safer option than carrying around a lot of cash
• An extra source of money in emergency situations
• A great way of shaping up your credit record which may eventually help you in purchasing a home, car. Etc
• Buying on credit cards can pay dividends! Cashback cards pay you a rebate for every purchase you make, usually in the form of an annual cheque.
• Buying goods on a credit card can provide you with extra protection. For example, if you buy goods or services costing between $75 and $15,000 on a credit card and these goods don't turn up, are damaged or faulty, you can claim against your card company, which "wears the supplier's shoes".
• With around sixty credit cards offering interest-free introductory periods on balance transfers, you can avoid paying interest on your plastic debt for up to a year.

Some cons of Credit cards:-

• If you are not using a 0% card and fail to pay off your bill in full every month, you could be charged interest at an annual rate of up to 25%.
• Need cash !! withdrawing cash on your credit card, either in a cash machine or over the counter will drive you mad. You'll pay a steep fee plus sky-high interest from the withdrawal date until every penny of your bill is cleared.
• Using credit card abroad can cost you dearly as you will be charged for 'currency conversion' typically 2.75% of your spending.
• Credit cards may be stolen and used fraudulently
• If you fail to pay up in time, card companies will charge you with hefty fines. Overshooting your credit limit, paying late or bouncing a repayment will cost you dearly.

To conclude the issue ,credit cards essentially gives you purchasing options but it does not increase your purchase capability ,as your salary remains the same and what ever you buy on your card you are going to pay for it at the end of the day !!!. So go for a credit card but remember your credit card is as good as your financial management , you falter and you are in for financial debacle of a life time so happy hunting for a credit card.