What are the advantages and the disadvantages of having credit card?

 Credit cards are the financial tools helpful to people in getting instant case or the credit in the case of cash crunch. Cash or the money is required on daily basis. Whether it is purchasing of groceries gas, or any other stuff, or want to invest in something, there is always need for the money. In today’s era, no person can imagine their life without money. And the credit card comes up as a financial tool in the case when a person running to of cash.

The credit card is beneficial in several ways helping the person to get the financial help in their down time and they can pay back after getting their salary or the income. But the use of the credit card becomes disadvantageous in the case when it is not used properly or is misused. The proper use of the credit card helps the person in managing their fianc├ęs more optimally and easily.

Today, here in this guide, we are listing you all the advantages as well as the disadvantages associated with the credit card.

What are the benefits associated with the credit card?

Following are some advantages of having the credit card:

One can easily purchase the big ticket products

Helpful in accumulating more rewards

Helpful in increasing the credit scores

No interest on ATM cash with drawl

In credit building

More rewards in the form of cash back and the miles point

More protection from the frauds

No fees for the foreign transaction

Free information about the credit score

Increase the individual’s purchasing power

Money safe in the saving account as the card is not linked to the saving account

Hold the rental cars or hotel room

Easy purchase for the big ticket products

Credit card helps the individual in managing their finances better. One with the help of credit card can easily buy any big ticket product or the expensive product and then convert the price of the product in easy to manage EMIs.

Credit card provides the users the option to buy expensive products and then pay its amount in small EMI formats. The EMI for the products like Cars, etc will be deducted every month.

Helpful in accumulating more rewards

Another benefit associated with the credit card is that the credit card provides more attractive reward points on the purchase from the credit card. Which means, individual is going to get the rewards on every transaction that they made from their credit card. The credit card helps in individual to earn on shopping. They can later use their reward points in the form of gift vouchers, exclusive discounts, cash back, or many more.

 Helpful in increasing the credit scores

When a person pays back the credit card bill on time or before the due date, this help them increase their credit score. More the credit score, more the person will be able to sanction loan on their name. Having a good credit score significantly helps the person qualifying the loan or for the new credit card in future.

 No interest on ATM cash with drawl

Many credit cards allow their users to withdraw the cash from ATM without paying the interest.  A person with their credit card can get the cash from the ATM anytime when they need money without paying the interest. 

In credit building

Purchasing using the credit card helps the person with the opportunity to build more credits. The person will be allowed to use their credits later in shopping for free.

More rewards in the form of cash back and the miles point

The best part of the credit card is that it offers the person rewards or the cash back on every transaction from the credit card. Which means, one every shopping from the credit card will make the person earn something in the form of cash back. And, this cash back and be used later for more shopping. 

More protection from the frauds

Most of the credit card companies are providing the safer credit cards and helps saving the individual from different kind of frauds and the malwares.

No fees for the foreign transaction

There will be no fees for the sending the money to the international business partner. The credit cards costs no fees for the foreign transaction.

Increase the individual’s purchasing power

With a credit card, the purchasing power of the person increases. The credit card functions as a additional financial tool helpful in providing the financial help in the case of cash crisis. Having a credit card means the person is having a financial help and thus can easily buy more products. With credit card, one can buy today and pay for it later.

Money safe in the saving account as the card is not linked to the saving account

Debit card is the card linked to the saving account having all hard earned saved money. This hampers the security of the money in the saving account. The credit card helps in providing any extra layer of security to the money in the saving account.

What are the disadvantages of having a credit card?

With so many advantages, the credit card is having their some disadvantages also. These are as follows:

More interest rates

In the case when a person fails to pay the credit card bills or the dues within the due date, the card will cost high rate of interest as well. The timely repayment is the only method to avoid paying for the interest.

Overspending

As mentioned, the credit card increases the purchasing power of the person. These credit card when misused or not properly used can lead to overspending to wasting money on useless things. This in last lead to financial mess and will impact your profit negatively.

The bottom line

So these are some advantages and the disadvantages associated with the credit card!