Credit Cards - the risk behind it
Credit Cards - The Pros And Cons Of It
Assume you travel out for an important work or assume that you are out for a function with your kid. If you are a lovely parent then you cannot say no to your kid when he or she asks for his or her rare and favourite toy or something else on your way. It might also happen that you end up in some trouble like accident or some serious issue that needs urgent money. The problem here in the above situations are that, you might not have planned for such an expense and you might not have money on hand under such circumstances.
These situations can be handled easily if you have credit card on hand. Provided the shop can process card payments.
Of course credit cards are of best help during emergency conditions. On the other hand, there is also the other side of it where one may end up in debt. If one is using the credit cards, then it is better for them to know both the pros and cons.
Pros of using credit card
- Tackle emergency condition easily: One can deduce that the credit card is of great help during an emergency situation. As pointed out earlier, there are situations when one cannot expect the need of money. During such situations, if you carry a credit card with you, one can never decline that using credit card is utter waste.
- No fear and tear: Many people fear to carry large sum of money with them. It is not that they are careless about the money, they are afraid of thieves who wait for chances to steal them away. Carrying a credit card is much easy than carrying cash.
- Easy carrying: Apart from the fear of carrying large amount of money, carrying money in your pocket or pouch itself is a big deal. It is not possible for one to dump large sum of money in his pocket. Instead of dumping your pocket or purse, carrying a simple plastic and worthy card is very easy.
- Block stolen card: Another important advantage is that, even though the credit card is lost or stolen, one can block it immediately which is not the case when the cash is lost. When the cash that is being carried is lost, you cannot blame others easily of stealing it. The stealer may claim that the money belongs to them.
- Track Expenditures: It is easy for one to know about his or her expenses easily. One need not note his expenses in the expense manager or a note book or save the expense bills. It is enough if he goes through his monthly credit card bill.
- Rewards and discounts: Certain companies offer special discounts for their customers using credit cards during their purchases. Discounts are for using cards and not for cash, mind it!!!
There is also variety of reward programs issued by companies based on the purchase of products.
Each and every thing that looks good also has a bad part in it. One has to accept that there are also certain cons of using credit card.
Cons of using Credit Card
- Can you afford it? It is easy for one to accept that credit card is of great help during emergency situation but even if it is an emergency situation, if you are not able to pay back the amount, then you are in a really big trouble. So, be careful of using it and make sure that you can afford the money later.
- Don’t cross your limit: Credit card has made us to forget about the worth of money. Some are in the habit of using it to purchase everything they see without worrying that they are the one who has to pay it later. Use credit cards but limit it yourself. Each card has its own usage limit. Know your limit before using it.
- Hidden interest rates: Understand the fees and interest rate while purchasing the credit card. Be clear about how the interest rates and fees are calculated. If you miss to know about it in advance, there are chances for you to pay lots more than your original purchase amount.
- Carry forwarding debts: Some are in the habit of carrying over the debts to the next month. Be aware that it is good to settle it early rather than to carry forward it to the next month.
Though there are few cons of using credit cards, the pros of using credit card are comparatively more. So, don’t be afraid to use it but use it wisely.