Credit Card – Advantages And Disadvantages
Posted by rupee on Thursday, December 20, 2012 Under: Credit Card
ADVANTAGES
The most conspicuous benefit of the card is that users hardly require cash money to make payment against numerous purchases. A lot of additional benefits of such card are listed our in details in the following manners.
No Immediate Cash – With the help of credit card, there is cypher requirement of cash. Therefore, the plastic money diminishes chance of carrying money with you all the time to make payment against purchases. Such feature allows users pay off the credit card bills easily in due course of time.
Free Credit – the very benefit of the card is what distinguishes it from other types of borrowings available in market today. Whether it is short term or long term borrowings, all of them come with higher interest rate. On the contrary, the credit card users don’t face compulsion of paying interest rate provided that payment is made within the grace period allowed with the card. Hence, the free credit for users is one of the distinguishing features of such plastic money.
Global Acceptance – one of the remarkable features is that it can be used anywhere in any part of the world. There is no restriction over utilization of plastic money whether you are traveling abroad for pleasurable sightseeing. Understandably, the feature of worldwide usages, plastic money gives major relief off carrying foreign currency on foreign tour.
Online Shopping – Thanks to credit card which tremendously facilitated online shopping or e-buying. Anything purchasable through online can well be facilitated with the card.
DISADVANTAGES
Interest Rate - The interest rate over the consumption of card is more exorbitant than all other options prevalent in market today. For instance, certain loans like car loans are available at 14%-15% annually while the personal loans are feasible at 18%-19% per annum. However, the prospective rate of interest over plastic money revolves between 35%-42% surprisingly. No doubt, the exorbitant interest rate makes it the costliest means of borrowings, and so users should be extra vigilant to overspend the card.
Credit Trap – Things never go awkward with the credit card as long as they are under control. In such circumstances, users are not charged exorbitantly. Even the payment made is not expensive and lump sum. However, for most individuals, the plastic money is just like intoxication of wine. The more it’s used, the more debts users accumulate. The travesty is that most users fall into credit trap followed by overspending the plastic money.
Conclusion – Though credit card sounds financially harmful to certain extent, however, its necessity can’t be denied. Moreover, overspending and credit traps are not fault of the card but users. Hence, we should use the card rationally to experience the best of such plastic money.
Credit card has both some advantages and disadvantages. However, considering today’s fast paced lifestyle of people, the necessity of credit card can’t be denied.
In : Credit Card
Tags: credit card advantages credit card disadvantages credit card
