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Friday, 9 December 2016

The advantages and disadvantages of credit cards



Advantages

  • Convenience--Credit cards save our time to search for an ATM and trouble to keep cash on-hand.
  • Free Record keeping--Statements can help to track our expenses and cut down unnecessary one.
  • Free loans—Mist of the card comes with 45-50 days interest free credit period.
  • Rewards and Perks-- Most of credit cards come with discounts, deals, and offers on shopping, entertainment, travel, and fuel. Some of them also enjoy cash back and earn reward points.
  • Build positive credit--Controlled use of a credit card can help you establish credit for the first time or rebuild credit.
  • Balance Transfer--Many credit card companies offer us to move balances to lower-rate cards.
  • Revolving credit - If you cannot pay your bill in full, you can carry over the balance after paying the minimum amount due. The balance will be charged interest, but you will be able to postpone the payment


Disadvantages

  • Temptation --Credit card makes us to spend beyond our means. This will only lead you to a debt trap
  • High-cost fees-- If you carry a balance or miss a payment then you will end up with paying high interest rates. Most of the card have annual fees associated with first year free. Even we have to pay 2 and 4 percent just to get the cash advance with high ROI. This means there is No free lunch


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