Advantages and Disadvantages of Credit Card

Advantages and disadvantages of credit card

The credit card is a plastic card; it is a wallet-size card containing data which can be interpreted by a reading device. This data includes details about the owner of the credit card, owner I.D account number etc.

An owner of a credit card can use as payment for goods or any services without issue a check or pay in cash. It is impossible to think of days when credit card not exists. But cards current phenomena and their ubiquity have become high which bank give these cards.

Various Financial Articles states the reason is that bank is making a ton of money by the usage, issues, and taxes of these cards

It allows its owner to withdraw money through the firm that has issued the card but he/she must know credit card tips for using. These cards can be an important tool for shopping, traveling, emergency, or unplanned expenses.

Advantages Of Credit Card

  • Convenient

    • Convenient as comparing the cash. You don’t need to count money and then buy something, you don’t need to -feel shy or hesitations to make sure that you have the money or not? You don’t need to sign any check. Just need to swipe your credit card and buy whatever you want.
  • Online Buy & Sale Option:

    • Plays an important role when you purchase or sell anything on the internet. It is impossible to buy & sell anything on the internet without a credit card.

Credit Card

  • In Some Conditions Give Rewards:

    • Give rewards to their owner for high usage as like tickets of airlines or any other expansive goods and services. A good issuer also gives you a point, when you use a credit card you get points these points will be saved, at the end you buy something by these points. Few offers also make sense of making it. Like with Goodyear credit card, you get discount on buying tires online.
  • No Interest for The Limited Time Period:

    • There is a timing period between paying and billing in your bill, at that time your interest does not charge.
  • Saves On Not Carrying a Ton of Cash:

    • When you are going to purchase anything expansive in which you need thousands of dollars, then the credit card is safer than compared to cash.
  • Helpful In Emergency:

    • In case of emergency when you don’t have cash. It will be beneficial for you.
  • Foreign Currency Transaction:

    • You can use in foreign countries without any converting process of money.
  • Safety In Case Of Theft & Loss Of Card:

    • In case of robe & loss of credit card, there is helping lines which are available 24/7 where you can report. Your card will be blocked; no one can use your credit.
  • Build A Good Credit History:
    • If you have a good credit history (like you pay payments at the time & full in each month), then it will help you to get loans, rental application or even some jobs.
  • Beneficial for Traveling:

    • Can also be beneficial for traveling. Because some major cab companies and some high-level hotels require a credit card for reserve a vehicle or room.

Disadvantages Of Credit Card

  • High Interest:

    • Have a killer biggest disadvantage of high interest. In all type of mortgages & loan,s you have to pay very high interest. If your payment of credit card will be a delay when you have to pay a lot of fines.
  • Complicated Fees & Fine:

    • There are different fine & Fees which cannot be understood by a normal person. Credit card get fines for let payment also they get taxes. Like the tax of withdrawing, the tax of balance transfer etc. If the withdrawal is done in the morning and you give the payment in the evening, it would still cost you interest.
  • Identity Theft:

    • Can easily be stolen by Identity number. Billions of frauds occur all over the world by the identity theft. It is very easy to steal credit card information than cash.
  • Transaction limit:

    • Have a transaction limit. Users are not allowed to transfer payment above the limit. If users cross the transaction limit, then its transaction will be undone by the issuer.
  • Bad Debit Cycle:

    • If you use recklessly, they can lead to a bad debit cycle and your CIBI score will be spoil.