Benefits & Negatives of Using Credit Cards
Credit cards are very convenient financial tools. While they do have some advantages, discipline is required in order to use credit cards appropriately. This credit-cardguide outlines some of the pros and negatives of credit card use.
The Pros of Credit Card Use
Obviously, credit cards are very convenient. With a credit card, you have the potential of carrying around thousands of dollars without packing your pockets full of cash. They are extremely easy to use and millions of stores accept them. You can use them in a brick and mortar shop or online. Credit cards are also a good choice for many when making big ticket purchases such as big screen TV’s, airline tickets, etc.
Finally, another pro of using credit cards is that they help individuals establish credit. Anyone in college knows how easy it is to apply and receive a credit card, and establishing credit can be very important. One of the main reasons individuals should be interested in applying for credit is that with a solid credit history and a good credit score, one can apply for a car loan or a mortgage.
The Disadvantages of Credit Card Use
Obviously, many people find credit cards to be the downfall of them. Credit cards, while convenient are very addictive. You can purchase items on impulse racking up hundreds or thousands of dollars in a short period of time. Another con against the credit card is the interest rates. Interest rates can cost an individual thousands of dollars over the lifetime of being a card holder. Credit cards aren’t cheap to use and when you near your credit limit and can’t charge any more, they can be very difficult, even near impossible to pay off the debt.
Another problem with credit cards is that with all the money banks make off their card holders, they still seem to be greedy and charge their cardholders high fees for even the smallest transgression. For instance, if you are a credit card holder and are late on a payment once, the bank can in many cases raise your interest rates charging you hundreds or even thousands of dollars extra over the life of the debt.
Although credit cards are convenient, make sure your’re aware of the pros and cons of using them so that you do not fall into debt or pay needless fess to banks.
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