Advantage and Disadvantage of Credit Card

Advantage and Disadvantage of Credit Card: Many of us want to take credit cards and many do not like to take credit cards. Why not everyone likes credit cards and why many people want to take credit cards will be discussed in detail in today’s post. Building credit, getting cash back, or fraud protection are some of the notable benefits of credit cards. You can rest assured that you don’t have to carry cash. However, there are only advantages to using credit cards, not disadvantages; It would be foolish to think so. In this post I will try to tell you in detail about the advantages and disadvantages of credit cards.

Credit Card Advantage

Let us first know about the benefits of credit cards

Create Credit Record

Proper use of credit cards builds credit records. And credit card spending limits can often depend on this credit record. If your credit history is good, then you will get additional benefits in terms of various credit card based services. If you pay your credit card bills regularly and make good transactions, your credit score will increase. As a result, you will be able to enjoy its benefits in case of next card or loan.

Security Against Fraud

Credit card companies take adequate measures to provide security to users’ transactions. If for any reason you suspect that an unauthorized transaction is being made to your card, you can immediately call the credit card provider for assistance. If you can’t find or lose the card again, call the credit card provider and they will block the card and arrange to give you a new card.

No Need to Carry Cash

Using a credit card is often more convenient than using cash. Besides, there is no problem in carrying credit cards as they occupy very little space in the wallet. Today, credit card has become a standard payment method in almost all countries of the world. Credit cards can easily be carried in the pocket while going somewhere. If you lose this card again, you can get a new card issued in a short time.


You can earn rewards by using your credit card in the form of cash back and points. There are also many credit card providers that offer sign-up bonuses if you meet certain goals within a certain period of time.

Accounting for Expenses

All transactions made using credit cards are recorded by the issuing institution and can be easily tracked. All your transaction information, ie merchant name, amount spent, date, etc. is saved. With this information at your fingertips, you can easily keep track of expenses.

Buying goods in installments and not spending immediately
You can buy products in installments through credit card. Larger payments can easily be split into smaller installments over a longer period of time. On the other hand, since the credit card bill does not have to be paid immediately, it is quite easy to arrange money for urgent needs.

Disadvantages of Credit Cards

Credit cards aren’t just about rewards or sign-up bonuses. It is a financial tool that if not used seriously will incur unnecessary charges and fees. So it is very important to know the disadvantages of credit cards. Let’s know all about the disadvantages of credit cards.

Overspending Mentality

Using credit cards can lead to overspending. Since the main purpose of credit cards is to provide spending facilities beyond your savings, your unaccounted spending can lead to overspending habits, which in many cases can wreak havoc on your life.

Fees and Interest

Credit card fees and interest are two things that can add up without the user’s knowledge. Interest in particular can escalate to such a degree that it goes beyond the credit card holder’s control.

In addition to interest, various credit card issuers charge fees for late payments, balance transfers, cash advances, foreign transactions, etc. Some issuers even charge an annual fee just for using the card.

The best way to avoid these types of interest and other fee-related issues is to pay off the balance (at least the minimum payment) every month. If that is not possible, it is better to pay the balance as much as possible. But in this case, your cost will increase and not decrease.

Overspending on credit cards puts many people in debt. If you don’t keep track of your regular expenses, you may run out of money in a short period of time and accumulate excess wealth. So it is better to spend only the amount that can be returned. Remember, with a credit card, you are using borrowed money. So if you don’t use credit cards carefully, it won’t take long to face the problem.

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