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Credit Card–The Pros and Cons

Credit cards have been a part of our modern culture. The purchasing power it gives the cardholder is substantial and is indeed of good value. Credit card application is easy and this gives its holder the power to do quite a number of purchases while not having cash as of the moment. Like other things, there are a lot of advantages and disadvantages of having a credit card. Having a basic knowledge on these things might help you while you’re planning to apply for a credit card.

There are a lot of things which give credit cards its popular stature today. Its most attractive feature is the ease of purchase and the increase in purchasing power. Since purchasing with credit cards doesn’t require you to bring even a single penny, this gives you the power to purchase many things in large value without bringing a lot of cash. Another great advantage of having a credit card is that some companies don’t accept cash in their online transactions – hotels, airlines, car rental agencies and some other online shops require you to have a credit card instead to process your payments.

Another feature of having a credit card is the protection of your purchases. They give you additional protection from defective, stolen or lost products that you may have recently purchased. If you’ve lost your original receipt, your credit card statement can prove to be a valuable resource since it can vouch your purchase. Over time, you will be able to build a good credit line record if you pay your credit dues on time. This credit line can later be used during loan application, rental application or in some cases, job applications too.

In times of emergency, credit cards offer you an irreplaceable source of money. This could fill in if you’re in a situation wherein you really need money. Meanwhile, some credit card companies also offer rewards and large discounts for their long time card holders. They may come similar to the concept of airline miles or travel discounts.

Credit cards also have their own share of disadvantages. The most common of such is that it encourages the holder to spend a lot. If you’re not careful on your credit card expenditure, this will definitely sum up and blow your budget away. Although you won’t have to pay for it now, you’ll eventually have to pay your credit card company the sum in the long run. While most credit cards usually have 0% interest rates when you’re able to pay within the grace period, their interest rates can strike hard if you’re not able to pay your bill on time. Another thing you have to look out for is that if you lose your card, it is imperative that you report this to the credit card company as soon as possible to avoid fraudulent use of your card.

Having a credit card certainly proves to be an advantage for you if you know how to control your expenditure. Its advantages would definitely go a long way in your financial record and lifestyle. The only thing you have to remember when using a credit card is to set limits and be a responsible cardholder. Control your expenditure, pay your dues on time and you won’t have any problem. If you have such qualities, then go ahead and apply for a credit card. It’ll definitely come in handy in the long run.