Credit Cards: The Advantages and Disadvantages of Using It

One of the advantages of using a credit card is for its convenience. You do not have to bring a lot of cash; all you have to carry with when you want to go on a shopping spree is your credit card and your self-control and you are ready to go. But like all things, credit cards also present two sides, the good and the bad.

Not Keeping Tabs Of Your Shopping Expenses Could Easily Let You Go Overboard

When you shop with the card, regardless of how many shopping bags you are already carrying, the cash in your wallet  is not diminished and this could give you a false sense of still having a lot of money to spare for more shopping. By nature, we have lots of material wants and needs that we have to satisfy; so we always say when I finally buy this, I will stop buying already, but we never do. Before you know it, when the small and big amounts are summed up, we end up with a whopping  credit card bill which could be mind- boggling.

Multiply this amount to two or three times, depending on how many credit cards you own, and then add those charges you made on our debit card to get the grand total of your purchases for one month.

You Could Earn Or Pay Interest On Your Credit Card

If you are not paying the full amount of your purchases for the month, then the credit card company will charge you with interest which you have to pay with the installments. The reverse will be true if you pay your bills in full and on time as soon as you get your salary.

Charge More And Earn More From Reward Points

If the credit card companies see that you are a big spender, then they will encourage you to spend some more by giving you higher credit and cash advance limits. Benefiting from these great offers can entice you to get another card and another card to double or triple the benefits such as reward points. Little do you know that this is also one of the credit card companies’ schemes to make you spend more on discounts for buying things that in reality have no need of.

Use Credit Cards Wisely And You Will Benefit Greatly

The greatest benefit you can get from credit cards is you can use it in times of emergency and you do not have any cash to spare. Using it wisely will earn you a good credit rating because it shows that you know how to manage your finances well and are able to honor obligations promptly. This will be very useful when you need to apply for bigger or more important loans such as for cars or your future home.

Bear in mind that credit cards will only be useful to you if you know how to keep your finances in order. You should stay within your limits and purchase only what you can afford to pay. Going beyond that premise could  spell financial disaster.