Advantages and Disadvantages of a Credit Card

Credit cards are one of the greatest breakthroughs that have been introduced in the financial world. It has made purchases and payments easy without having the need to carry cash with you. In the growing technology and evolving online transactions, people are buying and selling through the internet and works like a physical store where a buyer can purchase a product. Even bills payment and other forms of fund transfers are already available online. And this has all been made possible because of the credit card.

While there are cases we hear that a credit card holder goes into debt, credit cards are not all that bad. Here are a few advantages and disadvantages of having a credit card.

Advantages:

  • Ease of Purchases

One of the advantages of having a credit card is having the ease of purchase. There is no need to carry cash around and tracking of expenditures. Credit card serves as cash to almost any type of purchase or payment that needs to be made. With the advancement of technology, almost all merchants accept the payment in the form of a credit card.

  • Protected Transactions

One of the most secured transactions come from using the credit card. With proper diligence and use of the card, your transactions are secured because of the security measures that the credit card company implements in their system. Any transaction that is done with your credit card goes through the necessary validation before payments are approved.

  • Emergency Payments

In cases where you need to pay for medical emergencies where you did not bring cash or had no time to pass by the bank, credit cards prove to be most useful. Most emergency spending can now be paid through credit cards.

Disadvantages:

  • Spending Beyond Means

A great disadvantage a credit card brings is encouraging an individual to spend more than what the cash they may have. They are purchasing and using money that they do not have and owned by the bank.

  • High Interest and Accumulation of Debt

As a result of using the credit card, a credit card holder’s debt increases especially if the holder has the habit of rolling over his credit. Interest rates are being applied and accumulated that causes debt to increase.