All of your colleagues at work own at least one credit card. You can see how this piece of plastic has made their shopping trips easier and opened a lot of opportunities on things which they can buy. But they keep on telling you that owning a credit card isn’t all good. They told you that there are also several downsides when you have a credit card – and they’re telling the truth. When you have a credit card, there are pros and cons. And if you’re deciding whether or not to get one for yourself, you should consider all of these things first.
There are many banks which offer credit cards promising to give you low-interest rates and personalized terms for your needs. But when decisions involve your money, you should think several times. To help you come with a sound decision, here are some of the pros and cons of credit cards which you should consider before getting one.
When you have a credit card, you can experience these cons:
1) It’ll allow you to buy more items easily: Online shopping has become the status quo. Almost all businesses use this medium to sell and if you have a credit card, you can make use of this privilege. You can purchase anything online compared to using cash where you’ll need to make personal transactions.
2) It’s faster and more convenient: Purchasing everything online with the use of your credit card is very convenient. For one, you don’t need to go anywhere just to buy your favorite meals and items. You can do everything within the comforts of your home! The same is also true when you’re shopping physically in stores. Using your credit card doesn’t require you to count bills or write a check; you can pay for all your goods in one swipe.
3) It’s safer: Traditionally, when you’re about to go shopping, you’ll have to stop by ATMs and carry huge amounts of money. This can make you very susceptible to thieves and other similar crimes. This can also put your life in danger. But when you use a credit card, none of these will happen. You no longer have to carry cash because you can pay everything with your credit card thus, it will make you safe.
4) It’ll help you during emergencies: Having a credit card means you don’t have to touch your savings during emergencies. It’ll help you financially during emergencies when you don’t have enough money to pay for something outright. This means that other aspects of life will not be disrupted during trying times.
However, as mentioned, credit cards also come with several cons, and these are:
1) It’ll tempt you to purchase more: Because credit cards are easy and convenient to use, you’ll be tempted to buy items which you can’t afford (and even those which you don’t need). You can be more impulsive knowing that you have an easy medium to pay for unnecessary purchases.
2) It’ll increase your chances of being in debt: Most of the time, consumers will find it very easy to purchase items using their credit card but will struggle to pay all of these within the given terms. And this kind of setup can become the reason why they’re covered in debt. When you have a credit card, you should be responsible enough in paying the fees in time to steer away from accumulating too much debt.
3) It’ll affect your credit score: All of the things you do with your credit card will be reflected in your credit score. When you don’t pay for your credit card fees in time, your credit score will be adversely affected. And when your credit scores tell you how inefficient you are as a credit card user, your chances of acquiring mortgage or auto loan in the future can be compromised– you might not be able to get any of these when you don’t know how to use your credit card properly.
You shouldn’t immediately say “yes” just because a bank has offered you one of the top credit cards a consumer can have. You should think about this decision several times as this can impact your financial life positively or negatively. Owning a credit card is a very big responsibility, and you should be prepared for all of these. Use this article as a reference to come up with a sound decision regarding credit cards.
Amelia Smith believes that the key to understanding something isn’t always about how good the explanation is, but how engaged you are with the learning process. As such an integral aspect of her pieces for sites such as Go Bear is to ensure that insurance and banking concerns of her readers aren’t tackled just in a technical sense, but also in a way that they can relate to their lives.