Credit Cards: The Pros And Cons


This is a contributor’s blogpost …


Credit cards are kind of like super powers. They’re dangerous in the wrong hands, but pretty handy when used in the right situations. Your personal finances can remain completely stable while you use a credit card, but these little plastic rectangles also have the potential to sink you into horrible amounts of debt. In the words of Ben Parker, with great power comes great responsibility! If you’re on the fence about getting a credit card, here are some of the major pros and cons to consider…


Photo Courtesy of Petr Kratochvil via Public Domain Pictures


The Pros


Purchasing Power – One of the main thing that attracts people to credit cards in the first place is that they give you great purchasing power, not only locally, but also at stores across the world, as well as online and over the phone. Some major credit cards, notably Visa and MasterCard ones, are accepted by virtually any business.

Rewards – Another big attraction, especially these days, is the rewards that many credit cards offer. A good cash back credit card can allow you to save significant amounts of money on things like groceries, petrol, and select purchases from department stores. If you travel a lot, there are other cards that offer you free flights, hotel stays, and even car rentals as part of their rewards. Obviously, you don’t want to spend an excess of money simply to earn a few insignificant rewards, but why not make a little money back on things that you’d be buying anyway?

Credit Builders – Credit cards can often be essential when you’re trying to build your credit. By purchasing with your card frequently, and keeping on top of all your payments, you can build up a very respectable credit history in a relatively short space of time. In the future, this can dictate whether or not you’re approved for car finance, a loan, or even a job in some cases.


Photo Courtesy of Galactic Wanderlust via flickr


The Cons


Interest – One of the most glaring drawbacks of having a credit card is the interest rates that are tied to them. Using a bad card that has a high APR can cause you to sink deeper and deeper into debt if you’re not able to pay off your balance promptly enough. There are certain ways around this, but all credit cards carry this potential to punch a sinkhole in your finances.

Late Fees – If you miss a payment on your credit card, then you’ll be instantly slapped with a late fee. Although these are typically only a $20-$35, it will add up quickly if you’re a repeat offender.

Easier Spending – Credit cards make it way too easy to spend money, especially in today’s consumerist culture. When you’re not physically handing over tangible money, it can be easy to become totally detached from the idea of spending. Waving your plastic credit card over a contactless reader doesn’t seem like a big deal, does it?

Threat to Your Credit – Just as credit cards can build your credit, they can also totally decimate it if you’re not being responsible enough with using it.


Author: Urban Ponder Writing Team

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