Pros and Cons of Using a Credit Card

By
IntelligentHQ
Pros and Cons of Using a Credit Card

The use of best credit cards enables the person to borrow for no cost and get extra protection on all the purchases he makes. However, it is important to smartly handle the credit card because if the discipline is not maintained while using a credit card, it will end up paying a lot of interest. Moreover, what a credit card offers also matters a lot.

Just like everything, the credit card also has many advantages and disadvantages. So, a person should be well aware of the pros and cons of using the credit card. Here are the pros and cons:

Pros

  •    Take loan with no interest:

A credit card is suitable for you if you want to buy something very expensive that you can’t afford. It will enable you to buy everything you want. It allows you to pay for the item in full and then you can pay the cost by making some small payments.

  •    Get yourself protected financially:

Paying with credit card offers more protection for the consumer. For example, the faulty purchase made through credit card offers you a full refund unless it happens because of your negligence.

  •    Get different incentives:

You can enjoy a different incentive offers made by some of the best credit card companies. These incentives are cashback incentive, bonus, different types of rewards, etc.  

Cons:

  •    Late payment can cost you more:

There is a specific period in which you will be charged with low interest. That period is known as no interest period. If you are not able to pay off the money within that period, then you will have to pay the penalty. Many companies charge up to 18% of the interest rate when you are late.

  •    Encounter the risks:

It should be noted that using a credit card means borrowing the money that you will have to pay later. There are also some risks associated with it. For example, if you are unable to pay the money in the specific period, then the credit card company will charge a higher interest rate.

To avoid high-interest rate, many people consider short-term borrowing facility. However, it can also charge a very high-interest rate if the money is not paid on time.

  •    A credit card may charge you some hidden costs:

There are also some hidden costs associated with a credit card. For example, if you exceed your credit limit you may have to pay the penalty. So it is always important to keep track of your spending so that you can stay in your credit limits.

One of the most important things is to know which credit card will be best for you. Not choosing a right credit card can cost you more and you will end up paying more than you need. It is recommended to choose a credit card with 0% purchase facility especially when you are planning a special event such as a wedding, changing house, etc.

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