If you’re thinking of getting a credit card, you may want to consider both its benefits and its disadvantages. Credit cards can help you pay off your bills more quickly and stay on top of your finances when you use it correctly. However, when you’re not careful, a credit card may ruin your personal finance. That’s why it’s vital to consider both its pros and cons:
1. Get Cash Advances
One of the main advantages of having a credit card is getting cash advances when needed. It can give you a different way to handle emergencies while waiting for the next payday.
Many people have lost or been laid off from their jobs, and they find themselves in a situation where they don’t have the same amount of money that they used to have when they first started their job. Having a credit card enables you to stay on top of your budget, especially for your expenses.
2. Use It Conveniently
You can use credit cards conveniently as you can purchases online anytime. And for in person purchases, even if you don’t have cash, you can buy what you need using your card.
It’s also easy to track your spending as most credit card providers have online banking, which you can access anytime. In it, you can see your spending history, any fees, and what you’ve purchased. Tracking your expenses is vital for managing your finances better.
3. Offer Short Term Solution
There are some emergency credit cards great for monetary issues. Emergency credit cards are often issued to those needing a short-term solution to their financial issues. If you have an emergency, you may need to apply for an emergency credit card. Visit WealthLivingToday.com to find options for cards that may suit you and your needs.
4. Build Your Credit Score
Credit cards are key to building up your credit score, which will benefit you in the long run.
Most credit card companies are willing to give you a card even if you have bad credit. Credit companies will provide you with a lot of options when it comes to your credit card. They’ll even tell you how you should be using your credit card to build your credit score.
If you always pay off your monthly credit card bills on time, then the credit card company will be more likely to give you more credit. To improve your credit score, you need to keep track of your spending to check if you are getting into a situation where you cannot make payments. By keeping a detailed list of your spending, you can stop yourself from spending on something that will make you struggle to pay your bills.
1. Higher Fees
One of the most significant disadvantages of credit cards is they have higher interest rates. When accumulated, you can compare it to a mortgage payment.
Credit cards also have higher fees associated with them, including late fees, finance charges, over-limit charges, and other fees. These fees can accumulate quickly, and they can become quite expensive if you don’t pay them off quickly.
Credit cards also often come with penalties for each missed payment. In the long run, you can accumulate more debt if you continue missing your payment.
2. Purchase of Non-Essentials
With the power of using a credit card, some people are tempted to purchase things they don’t usually need, resulting in overspending.
Since it’s easy to purchase anything, some people can’t practice discipline in spending their finances, especially if they think a credit card can save them anytime. Unconsciously, they spend over their budget, which causes more debt to accumulate. When this happens, credit card bills will soar high until the user becomes incapable of paying such.
One of the worst results that may happen when you can’t make on-time payments is to lose your car, home, or other assets. The worst part is that you can emotionally suffer from the loss or damage to your property.
Getting a credit card is both beneficial and disadvantageous. With a credit card, you can get cash advances when you lack cash when you want to purchase something. You can even use it conveniently via online purchases. Since most credit card companies have online banking, you can easily access your spending history so you can keep track of your finances. You can even avail of an emergency credit card to solve your monetary issues. When you make payments on time, you can build your credit.
However, you can end up accumulating more debts if you misuse your credit card. As a result, you might lose your assets as well as your good credit. Always be sure to consider all of the possibilities before committing to big financial decisions.