Know the Advantages and Disadvantages of Having a Credit Card

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The credit card from any network allows the card-issuer to withdraw cash, transact money, keep records, remote- merchandize, and to pay for products and services; it works as a payment card. Sometimes, the security issues such as internet or credit card fraud crop up. However, the usage of Credit cards has its own advantages and disadvantages. Keep the following points in your mind, to make- up your decision whether you want to use it or not.



Flexibility on Purchases

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If you don’t wish to carry the cash with you or a company does not agree to cash purchase (hotels, airlines and agencies), the use of credit card can make purchasing easier. So, this offers you flexibility.

Safety on Purchases

If you have purchased a product and suppose the product gets lost, stolen or damaged, the credit card company grants you insurance on large purchases. So, you have some source of security.

Awards a Credit Line

A good credit history is important while applying for loans, jobs, and rental applications. Using your credit card wisely builds a good reputation; it aids you in providing your payments on time.


Credit cards do save you in times of crisis. Sometimes, when you don’t have enough cash with you, and you are stuck in a middle of a car breakdown, you may require a large amount of cash, and then your credit card saves you.

Discount benefits

Certain credit cards offer discounts on stores and companies such as travel discounts, shopping discounts and special insurances which are beneficial and helpful as long as you keep a track on your limits.

It is Safe

Keep a record of your monthly statements and check them carefully; if there are any errors, you can notify your company about it. You should keep a proper record of all the statements you get from the bank.

Save Money

Paying credit card bill timely saves your money for the future and the present. If you pay your bills monthly on time, you will save money on interest that giving you a good credit score. In the future, you are likely to undergo low interest rates.

Aided Protection

Make sure, if your credit card bestows certain aided protections, which saves your money while you travel. For example,  you will have an access to trip cancellations, lost luggage, and emergency assistance.

Convenient Method of Purchasing

Whether you opt for online shopping or phone purchasing, credit cards facilitates easy paying methods in monthly instalments. The mode of purchasing becomes easy if you make large purchases.


You Over Spend

The biggest disadvantage of credit cards is you cross your actual budget. You think you have access to “free money”. Since most of the credit cards do not call to pay off your amount each month, so even if you comprise of $100, you can spend $500 on your card.

Towering Interest Rates

This is a relatively expensive method of gaining credit, especially if you don’t use them judiciously because of their high interest rates and other expenditures. You overspend because at the time of purchasing you don’t realise how much you are spending.

Fraud Attempts

Sometimes, like cash, credit cards too can be stolen. They may be lost, stolen physically, or someone may take away your credit card number and use your debts. But, these days there are security measures to keep a check on your purchasing limit.

Unpaid Balances

One pays very high rate of interest by sending more and more each month. An individual is billed monthly if he/she forgets about the earlier purchases made by the credit card. At the end of the month, when you see your purchases for the previous 30 days, you are in shock. The unpaid balances are charged at a very high rate of interest.