Advantages & Disadvantages Of Credit Card
No matter how fascinating it is to get a credit card, there are still advantages and disadvantages attached to it. Applying for a credit card just for the status symbol will only going to increase expenses for you. In today's time, it is very difficult to choose a credit card among so many options. You need to begin by analyzing your needs and spending habits and choosing the credit cards that suit them. After selection of credit cards, compare them in order to arrive at a credit card that is of the highest value to you. Credit cards can be your friend in need or your biggest enemy depending on how you use them. Without any further ado, here is the complete guide on credit cards along with their advantages and disadvantages.
What is a credit card?
A credit card is a plastic card having 16-digit numbers on it. It helps in finding you in times of emergencies or shortfall of funds. This gives you the purchasing power and you can use it to aid your online or offline purchases. Credit cards are of two types secured credit cards and unsecured credit cards.
Secured credit cards are issued against the fixed deposit whereas unsecured credit cards are issued without the fixed deposit. Just not this, credit cards are further divided into different credit cards lifestyle credit cards, travel credit cards, entertainment credit cards, cashback credit cards, rewards credit cards, etc. You can choose a credit card that complements your needs and spending habits.
Advantages of credit cards:
Here are the reasons for applying for a credit card:
- They make the funds available 24x7.
- They are easy to carry and are more secure as compared to cash.
- They help in building a credit history.
- You get to enjoy shopping benefits, welcome benefits, travel benefits, and many more other benefits on a credit card.
- You can have multiple credit cards.
Disadvantages of credit cards:
Below given are the reasons why you should think twice before applying for a credit card:
- If the credit card dues are not paid on time, it can lead you to a debt trap.
- If they are not used properly, then they can harm your credit history.
- It is not necessary that you get to enjoy all the benefits with one credit card.
- You may not earn reward points on all the transactions.