Guide on Credit Card Benefits & Disadvantages You Must Be Aware Of
CREDIT CARD BENEFITS – Here are the advantages and disadvantages of using a credit card that cardholders must be aware of.
Are you mulling over applying for a credit card? Before fillin in that application form, it is best to know the different credit card benefits and disadvantages of having this type of financial card.
Credit cards have a lot of benefits but their reputation is undeniably tainted by the experiences of individuals who missed to handle their credit cards the right way. It is important to know both sides as well as the qualities that you should have to avoid being one of those who only earned piles of debts.
Here are the credit card benefits for the cardholders:
Financial Emergency Preparation. Having a credit card may also mean always have something to turn to financially when the unexpected happens. Let us say that your budget failed to make it to the next day. You can have the grocery purchases, fuel expenses, and the bills paid through your credit card. You can settle them later on if your salary has already been given.
Convenience. Having na credit card allows you for a cashless shopping, dining, and other payment purposes. You can go to shopping malls or anywhere you want to visit without having to carry along a huge amount of cash thus reducing the risk of losing your money. In case of losing your card, you can easily have it blocked by calling your card provider.
Perks and Privileges. Most often, partner stores and establishments of banks have special offers for the credit cardholders. These includes discounts and promos that can lower the cost of your purchases or give your freebies.
Cash Advance Facility. One of the major credit card benefits of several cards is the Cash Advance feature that allows the cardholders to obtain cash for something else. Most often, the cash advance is set at a certain percentage based on your credit limit. It can be another excellent preparation for a financial emergency.
Building Credit History. Maintaining good records of your credit card billing statement can help build your credit score. It can boost your chances of approval when applying for loans to other entities that consider credit scores in the future.
Here are the disadvantages of credit cards for the cardholders:
Temptation. Truth be told that the wide access that credit cards provide you makes it so easy to overspend. Credit cards are very easy to use thus you really need to have the kind of discipline that’s enough to limit your spendings using the card.
Interest Charges. Some credit cards have huge interest charges for unpaid billing statements. Thus, they can lead you to piles of debts if you won’t use it only for the amount that you can pay.
Fees. Also one of the disadvantages of credit cards is the possible monthly fee that you have to pay for like the membership fee. There might also be fees for cash advanaces.