The Advantages of Owning a Credit Card
The advantages of using a credit card are pretty obvious. For starters, you don’t always have to have the money with you to purchase something. Therefore, if you find something you need right in that moment and you don’t get paid until next week, a credit card comes in handy. This is especially convenient in emergency situations with no other option available. College students often take a strong liking to credit cards because they are always on the move, without much money in their pocket. While struggling to pay off their student tuition, they don’t have to immediately worry about small expenses when they can obtain a credit card. However, we will discuss how this can backfire later. Also, if you prefer not to carry cash because it is easily lost or stolen, then a credit card seems the most practical. It is simple to carry around in your wallet, and if it goes missing, you can call your credit card company and get things sorted out. Additionally, the money spent via credit card is much easier to track than when you spend cash. You can keep your receipts and compare them to your monthly statement to stay on track with your spending. If you are a responsible individual, this can even assist you in saving money. Finally, there are tons of benefits and reward programs associated with credit cards. Businesses track what you spend the most money on and offer opportunities to save money while purchasing things from their company. This includes services such as air travel, casinos, hotels, and more.
The Disadvantages of Owning a Credit Card
Despite the many advantages of using a credit card, there are many disadvantages as well. First, the convenience of a credit card is easy to fall into. In other words, because of the simplicity of spending money, you will be more inclined to charge more and more onto your credit card. Then, every time you miss a monthly payment, you are charged even more than what you’ve spent on the credit card. This is because of the card’s APR and interest rate (we’ll get into that later). So, you get built up on payments and you’re in debt before you even know it. As a result, you end up with bad credit which affects your ability to apply for loans, other credit cards, security deposits, and cell phone contracts, and even getting approved for apartments, cars, and employment. It is important to remember that credit card companies are not your friend. They are looking for ways to outsmart and overcharge you, hoping that you will not notice or understand that they are in the wrong. Unfortunately, this usually works out for them because customers do not know everything they should about their credit cards and all the charges that come along with it. As a result, to avoid overcharges and mishaps, it is necessary to be very attentive and knowledgeable when it comes to your credit card.