Pros and Cons Of Credit Cards

People’s feelings about credit cards are mixed. Some people love credit cards while others hate them. If you are thinking about getting a credit card, then it is important to note that there are pros and cons.

Build Your Credit

One of the simplest things that you can do to build credit is to use your credit card. If you make payments on time, then your credit score will go up several points. A credit card not only helps you build your credit, but it can also help you repair your credit.

Ability to Earn Rewards

Many credit card companies allow you to earn rewards. You will be able to redeem your credit card points for things like merchandise, gift cards and cash. The more you purchase with your credit card, the more rewards you will be able to earn.

Pay in Installments

If you need to make an expensive purchase, then you can easily do so with a credit card. You will be able to charge the purchase and pay it in installments. Many credit card companies will not charge you any interest if you pay the card off within a certain amount of time.

Fast to Use

It is quick and convenient for you to use a credit card. All it takes is a few seconds to swipe it. It is a lot quicker than writing a check or using cash.

Protection From Fraud

If a thief steals cash from you, then there is really nothing that can be done about it. However, you are protected from fraud if you have a credit card. All you have to do is contact your credit card company and tell them that the purchases were fraudulent. It may take a while to fix this problem, but you will not have to worry about being responsible for charges that you did not make.

You Don’t Have to Carry Cash

Carrying cash can be inconvenient. You may find that you always have to go to the ATM. It is also unsafe to carry around a bunch of cash. You will not have to worry about carrying cash if you have a credit card.

Credit Card Debt

Credit cards tempt people to overspend. That is why it is easy to get into debt. Many people charge too much on a credit card and find out that they cannot pay it. As a result of this, the balance keeps growing. That is why once people get into credit card debt, it is hard to get out of it.

High Interest Rates

Credit card companies are known for having high interest rates. In fact, some credit card companies have interest rates that exceed 20 percent. Even if you are paying every month, you may still be in debt for a long time if you are only making the minimum payment. In many cases, it takes over 10 years for people to get out of debt.

Sneaky Fees

The interest rate is not the only thing that you have to worry about. Credit card companies often charge fees. For example, you may be charged a convenience fee for using your credit cards to make certain purchases. These sneaky fees can drive up your credit card balance. That is why many people opt to use a debt settlement program.

Make You Feel Richer

One of the reasons that people overspend and end up needing a debt settlement program is because credit cards make people feel like they are richer. If you have $100 in your bank account, then you know that you cannot spend more money than that. However, if you have a card with a $10,000 limit, then you have a lot more buying power.

Credit card companies know that people will spend more if they have a higher limit. That is why they will raise the limit if a person consistently makes payments on time.