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Things That Make You Love and Hate Credit Card



May 09, 2017 – Comments (0)

In today’s financial landscape, credit card has become an inevitable part of the lives of many people. Needless to say banks are always more than happy to give you a credit card with lots of enticing offerings because they make a huge amount of money when you use those cards. Credit cards come with some hidden costs about which the common users aren’t even aware of. However, owning a credit card isn’t that much of a bad thing that many may make you believe. Though almost all of us have heard horrible stories of credit card holders getting buried under a huge amount of debt, if you can use your card responsibly, it can bring along some significant benefits your way. Let’s have a look at the advantages and disadvantages of credit cards.

Advantages of Credit Cards

Purchasing Power

Credit cards provide you with a huge convenience when it comes to purchase something. Remember the earlier days when this piece of plastic didn’t even exist and you had to purchase everything physically and of course, with cash, which sometimes became a problem. But today, with a credit card, you can purchase almost anything and from anywhere – be it an overseas store or local one or e-commerce store. Credit cards make your life much easier, especially when you want to buy something but fall short of cash. With your card, you can make the purchase now and pay it back later at your convenience.


One of the biggest advantages of using credit cards is reaping the rewards that come along with your spending habits. Remember that banks always try to entice prospective customers with different kinds of incentives and rewards provided you maintain a good credit rating and pay your balance in full and on time each month – otherwise the amount of interest will be more than your reward’s value. Though the type of rewards can vary based on your card, since there’s a wide range of options available, you would definitely be able to find a card that fits your lifestyle. Rewards usually include cashback on certain purchases, free hotel stays and discounted flight tickets, among others.

The Credit Boost

Spending through credit cards provides advantages that go beyond mere purchases. For people trying to develop credit, credit cards can be extremely beneficial. By making your payments on time, maintaining a low outstanding balance and making frequent purchases, you can quickly develop a reputable credit history. Remember that your credit score plays a crucial role when it comes to obtaining a loan at fair interest rate. Act wisely on your account and your credit score will definitely mirror your accountability and dependability.

Faster to Use

Unquestionably, credit cards are much quicker to use, especially when compared to writing a check. You just need to swipe the card and you’re done. In addition, if you want to buy something actually costly and don’t have sufficient amount in your account, then your credit card comes to the rescue. Some credit cards empower you to pay the item’s entire amount at one go and the amount gets distributed over a certain period and you would need to make periodic payments to clear the balance. Remember that you should pay this total amount within the interest-free period or else, you would need to pay a penalty that would be added to your outstanding balance each month.

No Need to Carry Cash

Sometimes, for big purchases, we need to carry wads of cash, which is difficult and risky at the same time. One of the advantages of having credit cards is it allow a safer way to purchase because credit cards connected to MasterCard, Visa etc come with zero liability policies. It means if your credit card is stolen or lost, you will get reimbursement for any fraudulent activity as long as you notify your card provider within a stipulated period of time.

Funding in Emergency

Ideally, everyone should keep an emergency fund that helps him/her to stay afloat during a medical emergency, a lay-off or any other unexpected event. But that may not be feasible always. Your credit card can come to your rescue in these scenarios. For instance, during a medical exigency, in case you don’t have adequate amount of money to pay the bills, you can always use your credit card to get out of the hassle for the time being and pay the amount later at your convenience. Hence, it’s advisable to maintain the lowest possible balance on your card with a greater spending limit to obtain maximum flexibility.

Internet Purchases

Today, credit cards have become an integral part of the ecommerce and internet economy. Though you can also use your debit card for making the purchase, you will need to have sufficient amount of money in your bank account in such a case. You can’t use cash for an online purchase and for that reason, it’s advisable to hold at least one credit card. Moreover, some of the most profitable deals can only be found on the internet. In case you don’t own a credit card, you may miss out on those deals and need to pay extra bucks when buying it from a brick and mortar store.


It may sound unbelievable, but credit cards actually provide better protection compared to debit and ATM cards. For instance, if your debit card got stolen or lost, you may’ve to pay the entire amount if you don’t report the lost card to the provider within a certain period of time. On the other hand, in case of the card being a credit one, you may get your money refunded if the card is utilized fraudulently. You just need to make sure that there’s nothing wrong at your end like writing down your credit card PIN number at a prominent place easily accessible to unscrupulous elements.

Disadvantages of Credit Cards


One of the most critical disadvantages of using a credit card is that it comes along with the highest interest rates among all other types of mortgages and loans. Based on your credit card and the way it’s used, you may end up paying hundreds of bucks only as interest over a period of one year. However, there are a couple of ways that you can use to get rid of this hazard. First, you can repay the entire purchase amount within the grace period and secondly, you can look for a card that comes with 0% introductory APR. By opting for the latter, you would receive some time to pay off the purchases.

Hidden Costs

Most of the times, credit card companies try their level best to make you a holder of their card, needless to say without telling you about the processing fees and start-up fees. These companies have complicated fees and fines, which makes it extremely difficult for a general person to understand. First of all, a fee will be applied if you fail to make your monthly payment on time, or miss it completely. Secondly, in case you cross your credit limit, you’d need to pay a penalty. Furthermore, stay away from withdrawing cash through your credit card. Because a fee will be applied and interest would start racking up immediately as there isn’t any zero interest-free period applicable on cash withdrawals.


One of the biggest downside of owning a credit card is the tendency of overspending. Many cardholders don’t feel the bite at all when they purchase something without exchanging actual money. Remember that while credit cards provide the freedom to make purchases now instead of later, the bank would be coming after you first if you fail to use the card the right way. In case you don’t repay the balance on time and in full, you’ll be charged with a high amount of interest together with a late payment fee. Hence, in case you’re not careful enough with your card, you may land up into the vicious circle of a suffocating debt.

Lower Credit Rating

If not used carefully, your credit card can simply send your credit score crashing down. In case you miss payments, have excessive number of open credit card accounts, or carry a high balance, your credit score will surely take a hit. With so many businesses and even landlords at times of signing a lease judge you based on what your credit score is, having lower credit rating can make life extremely difficult . From getting a loan approved to getting a house on rent or being asked to pay security deposits on your utilities, life can become extremely difficult. So, you should understand how a lower credit rating can easily ruin your future, especially in terms of leasing and housing applications.

Debt Trap

Credit cards can be dangerous for people who’re shopping freaks and lack self-control. You need to understand that a credit card is finally a type of borrowing. In case you don’t repay your entire balance on time and in full, interest would starting racking up quickly and your debt would soon become suffocating. Often due to late payments or missed payments, many credit card holders find themselves buried under huge credit card debt without any way out. Between charges and fees and piling interest, the scenario seems to get worse with each passing day.

Security Issues

Your credit card can simply put you at the hazard of credit card frauds. Identity theft fraudsters don’t need to have your credit card to obtain your information. Instead, they can hack the store or websites where you’ve used your card to get your card details and can make fraudulent purchases. In addition, when you use your credit card for everyday purchases, a false sense begins to develop that you’ve more cash than you actually do. Remember that you must logically balance credit card debt with the amount of cash you’ve in your pocket.


Credit cards can easily make your life easier as long as you use them wisely. Else, they can become a great financial burden. If you want to have this piece of plastic, consider maintaining the following rules:

Don’t overspend

Keep track of every purchase

Craft a spending budget

Avoid cash withdrawals from ATM

Repay the balances of all of your credit cards on time and in full

Don’t handover the credit card information to someone else



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