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Almost 67% of the world population owns and uses credit cards. Credit cards are quite popular because of the financial facilities they provide, especially to the youth.
Though credit cards come with a number of great benefits, they also do have a dark side. So let’s have a detailed look at all the advantages credit cards offer while also discussing some of their disadvantages. Let’s start.
Advantages of Credit Cards
Credit cards come with uncountable advantages. Yet to illustrate it briefly, we have mentioned only a few key benefits
They help you Build Credit History
First of all, owning a credit card clears your way of getting more credit cards with much better features. How so? Well, credit cards help you build a strong credit history which is required by credit card issuers when applying for one. Repaying debt and bills on time, not consuming too much credit can help you build good credit.
You don’t have to Carry Cash
The more cash we have in our pockets, the more uncomfortable we are because carrying cash comes with a lot of insecurity. Once you have your cash stolen, there is no way of getting it back. Yet this is not the case with credit cards. They provide you a lot more secure way to carry money. Even if they are stolen or you lose them somehow, no one can’t use your credit unless he knows the password.
They Offer you Reward Points
Most credit cards often come with rewards and perks. These rewards might be in the form of cash, points, or travel advantages. Hence you can either have your cashback at every purchase, you can redeem points to make purchases, or you can use the travel advantages to books flights and hotels.
Some of them even offer low Introductory Rates
Few credit cards like Vanquis Card some with a relatively low interest rate. Some even offer 0% interest for a certain period of time. This can be a great advantage for you as you don’t have to pay extra than the bill and you’ll be able to make payments on time, thus your debt will remain low instead of continuously rising high.
Easier Budget Management
As credit cards come with limited usage restrictions, thus you will only spend the money that you are allowed to and no more than this. This feature can greatly help you in managing your budget. You won’t disturb your budget by spending more and you’ll be able to make more and more savings.
Disadvantages of Credit Cards
Given below are the few cons of credit cards according to some people.
You are buried under Burden of Debt
Even so, credit cards come with so many facilities, still, we shouldn’t forget that after all, it’s a debt. And we all know there is nothing more dangerous than to be buried under debt. So as long as you can afford to use credit cards with all of their interest rates annual fees, you are good to go with it, but if you can’t manage to pay their bills on time, we would suggest you avoid them as much as possible.
They can even lead you to a Bad Credit History
Though we have said earlier that credit cards can help you build a strong credit history, it can also lead you to a bad credit score. If you’re not able to make payments on time, it can have an adverse effect on your history and you are less likely to get approved for any other cards in the future.
They Come with Restrictions
Some credit cards are accompanied by unnecessary restrictions which is the most disturbing thing of all. Just, for instance, some cards allow you to use them only on certain places and occasions, like travel cards which are not comfortable at all.
