The Pros and Cons of Having Credit Card

THE PROS AND CONS OF HAVING CREDIT CARD

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Plastic money is much in vogue today. Like many other conveniences of modern age, credit cards are a product of technology and clever thinking. These plastic devices have now become a ubiquitous feature of our mundane, day-to-day, buy and sell world. Credit cards are geared to make life easier for the common person, who is increasingly becoming a gargantuan consumer of goods and services.

A credit card is a piece of plastic with some engravings and codes that help one pay for goods and services even if one has no cash or currency notes on hand. This part is easy. But this short process of buying and paying through the card can become paying through one’s nose. Because, what happens invisibly while transacting business with the help of a credit card is not always a smooth affair in the long run. One must always remember that, ultimately, this card is as good as your credit and each transaction made through the credit card has legal implications. At times, it is an invitation to get into debt with all the attendant complications.

Each time your credit card helps you buy something, you, in fact, are borrowing from your credit line with the credit card issuing company. As a borrower one is expected to make monthly payments on the outstanding balance to the credit card company. A credit card holder may be required to pay just the minimum amount until the due date, usually once every month. If the credit card holder fails to pay the required minimum amount, a finance fee is charged to him/her. The fee is often hefty and inordinate.

Obviously, there are advantages in having a credit card. One can buy a lot of things without carrying wads of notes in one’s wallet or pockets. Keeping track of one’s finances and expenses becomes easier because a single accounts statement is made available by the company. Purchases can be made simply by mail or phone. Payment of expenses can be made in easy monthly instalments. If the product bought was defective, credit card allows one to withhold payment for it. The convenience is extensive indeed—car rental, hotel, restaurant and other reservations. At times, it feels like a great bliss in a complicated world where time is short and chores unlimited. In an emergency, one can use the credit card to obtain cash. One’s credit card history helps one to enhance one’s credit-worthiness which can prove to be a boon when one wants to avail of home loans and other larger borrowings.

But one must not forget that a credit card demands to be used carefully and very prudently. Like most modern devices, a credit card is neither good nor bad but depends upon its user to make it so. Yes, the credit card has its pros and cons. Only its advantages are immediately visible and readily availed of, while disadvantages remain hidden. For impulsive buyers, credit card can become a burden so utterly disproportionate to the weight of this plastic genie. It can turn its reckless user into a compulsive over-spender and bury him/her into a heap of debts.

Plastic accounts are truly handy and serve the same purpose as money. With literally millions of establishments the world over accepting credit card payments from their customers, paying for goods and services has never been easier. Yet, despite all the convenience that credit cards bring, and despite the purchasing empowerment the credit card holders experience, there are still things that need to be considered before securing a credit card.