Advantages and disadvantages of credit cards

By | February 21, 2015

Welcome to the world of credit cards

Are you perhaps considering getting your very first credit card? Before you do so it might be worth focusing on the various plus points and negatives that might be associated with having credit cards.

You’re no doubt aware that some people get themselves into problems with credit cards. However there are others who manage them very well indeed and actually make money from having one, rather than losing money in interest charges every month. Read on to find out about the positives and negatives of having a credit card.

The advantages of using a credit card

Essentially a credit card can provide you with a short-term line of credit – a loan that’s good for a few weeks without incurring interest charges. Providing you pay the balance in full on each and every statement, you won’t pay for the privilege of having a card.

Additionally there are cards that provide you with cashback or other perks such as shopping vouchers or points. If you never have an ongoing balance you can actually do quite well from having a credit card.

If you do have an outstanding balance and you move it to one of the balance transfer credit cards available, you can do away with interest charges. This also gives you time to pay off the entire balance as quickly as you can.

The disadvantages of using a credit card

If you have a balance that you carry over from one month to the next you might find you rack up quite a lot in interest charges each time. In some cases you can find the minimum payment covers the interest and not much else. This means you’ll pay for the privilege of holding that debt without actually reducing it very much.

Some people are also too tempted by credit cards to use them to their advantage. In this situation a credit limit can be a huge temptation to resist – and one that ends up pulling them down into financial trouble.

If you are habitually very close to reaching your credit limit you can also incur charges for going over it, even if only by a relatively small amount. This can increase your debt and make it even harder to pay it off.

If you use them wisely they can be well worth having

As you can see it is well worth bearing in mind the pros and cons of credit cards of all kinds before you consider having one yourself. Only you will know whether it is a good idea to apply for one in your case. 0% APR credit cards can be very tempting but 0% credit cards for purchases typically only last for a short period of time. Make sure you know all the facts before opting for a particular card, and make sure you consider how likely it is that you will be able to manage the card responsibly.

In truth you will be the main factor that decides whether a credit card is good for you and your situation or not.

This post was contributed by moneysite.com – Online money transfer.