Aug 21, 2017 | imalisonhenry |
Pros & Cons Of Using Credit Cards Credit cards are great tools if you use them wisely. You can borrow at no cost, get extra protection on the purchases and get the cashback and the reward points as well. If you somehow have any debt on the card, you can consult a credit card debt services provider, who will suggest the way out. Now let’s see some of pros and cons of having a credit card: Pros Speed Of Purchase If you need to buy something expensive and can’t afford to pay for it, you can use the credit card. If you own a 0% purchase credit card, it will allow you to pay for the item in the full and then spread the costs over many months. If you make the payment before the end of the interest- free period, you will not have to pay any interests for using the credit facility. But if you miss the deadline, you will have to bear the sum along with the interests every month. Buyer protection When you use a credit card to make the purchases, you get more buyer protection. You’ll get the money back if something goes wrong. So if the company faults or the purchase is faulty, or it doesn’t turn up, you don’t have to worry as you can claim the money back form the credit card provider. If your card is used fraudulently, then your card provider should refund the money. Loyalty Bonus There are some cards which offer incentives for using the cards. You can get the cashback, loyalty points, or air miles. It means you can make your card earn for you. These are good if you make the payment of the bill in full. Otherwise, the interest charged will be more than the rewards. Balance Switching If you have debt on the credit cards, getting a new card can be a good option. You could cut the interests rates to zero by transferring the debt to a 0% balance transfer card. There may be some transfer fee but at- last you’ll end up saving on the interest costs. Cons Lethal Debt Trap It is crucial to understand that a credit card is a means of borrowing. It allows you to buy now and pay later, but there are risks. If you don’t make payments on time, you may end up paying interests. It is always better to make timely payments and use it when you need short-term borrowing. Hidden Costs You need to be aware of any late payment charges besides the costs of interests. You may have to pay charges if you exceed the credit limits. So keep track of the spending and try to pay the bill on time. Get The Right Card Try to get a 0% purchase card otherwise you could end up paying more. In The End While credit card debt services are there to manage the debt but you must use the card carefully.
If you somehow have any debt on the card, you can consult a credit card debt services provider, who will suggest the way out. Now let’s see some of pros and cons of having a credit card.