Like everything in life, there are the people who love credit cards and then there are those that dislike them. Each of these people has very valid reasons for their choice of credit cards can be both a blessing and a curse at the same time.
Pros of using a credit card
Bigger shopping selection
With a credit card, you have more shopping options as you can shop online. As you know shopping online not only opens up your local shopping area but the world.
You have instant access to downloads for books, music and various media. You can shop from the comfort of your home and have your goods delivered to your doorstep avoiding all the hustle and bustle.
A lot of credit cards with various installment plans whereby you can pay the shop the full amount for your good and then pay off your credit card purchase in affordable monthly installments.
They are faster to use
A credit card is a lot easier to use all you have to do is a swipe and your purchase is paid for. This cuts down the time-consuming writing of a cheque, searching for the cash and or the high fees you pay for withdrawing the cash.
Build a good credit history
You can use your credit card to boost your credit history which if you manage correctly can be used to give you a better rating. Good ratings make it easier for the bigger purchases such as houses and cars.
Fraud and or theft protection
Unlike cash, if your credit card is stolen you can stop all payments on the card. Most come with this protection cover so any purchases that may have gone through after it was stolen are sorted out.
You can stop payment on transactions that you feel are not correct and it cuts down on the need to carry around cash.
Rainy day cover
They come in handy for emergencies and most cards have reward point systems whereby you get points for purchases. These add up and can help with the purchase of various thing such as air tickets, petrol, etc.
Cons of using a credit card
Risk of getting into debt
A credit card can be very tempting in that if not kept in check you could potentially spend more than you can afford. There are numerous studies that show people are more willing to spend on items with a credit card. Items that they would not normally buy if they did not have one.
Impacts your future income
Every time you make a purchase with your credit card you are basically borrowing money from your bank. So, the following month that repayment will have to come out of your salary, this includes the fees for that loan.
Credit card terms and fees
A lot of times people take a credit card no fully understanding the terms and conditions. This can lead to the user getting into hot water or a huge shock when one starts to realize that their card is costing them more than they bargained for.
Some credit cards come with great offers, but they also have the darker huge fees and strict terms that go with all the deals.
Have the potential to negatively impact a person’s credit scores
Just like a well-managed credit card can give your credit score a boost so can they give it a black mark.
If you misuse your card or have payment problems it will negatively impact credit scores. Keep in mind that misuse also leads to high-interest rates.