Friday, June 11, 2010

The Pros and Cons of Using a Credit Card

In this fast growing world, using credit cards have been popular to people as an alternate form of payment to using cash. However it is like a double-edged sword which could make your life easier if you are using it wisely or disastrous if you have no control to it. So what are the Pros and Cons for using credit cards?

Pros:
1) Credit cards are easier to carry than cash. Instead of carrying a whole stack of dollar notes in your wallet, you can always replaced it by credit card when you are going to buy big tickets items like jewellery, travelling packages, laptop etc.

2) Credit cards can give you discount when you are purchasing items from certain shops. Some people carry many different credit cards with them to see which one can be used to get the discount from the shop.

3) Credit cards allow you to buy first and pay later. Sometimes you need to pay a bill or buy something but you do not have enough cash at that point of time. In this case, credit cards are like someone who lends you the money to do your payment.

4) Credit cards allow you to buy thing online at an ease. Basically you have to key in your credit number and other details if you have confirmed your purchase.

5) Credit cards can be used in many countries. In this case you do not need to exchange a large amount of foreign currency for the country that you are going to. Most credit cards will do auto conversion based on the updated exchange rate when you do the payment in other countries.

Cons:
1) Losing your credit cards can be a headache. You have to call the credit card company immediately to block the usage of the card. It is to prevent any people who have picked your card from using it.

2) Though credit cards allow you to buy first and pay later, it may trigger people to buy more than the amount that they could afford. If you do not pay up promptly for the credit cards bill, high interests will be charged. Some people have become bankrupt as they cannot pay up for the credit card bills.

3) Security is a major concern if you are buying thing online using credit card. If the online website is not secured, important details like your credit card number, account number and your personal particular can be captured by hackers. They may just use these details for their own purchase.

Personally I do not have a credit card even though I am qualified for it. In my opinion, I feel that the Cons outweighed the Pros of using it. For big tickets item, I will normally use cheque or debit card to do the payment.

2 comments:

esthermelvin said...

keep update, please..bless you!!........................................

saa said...

nice to know you, and glad to find such a good artical!.........................

Have you started your journey towards financial freedom?

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