Advantages and Disadvantages of Credit Cards

599 Words3 Pages
A credit card allows you to borrow money to pay for things. There will be a limit to how much you can borrow called your credit limit. At the end of each month you can either pay off the full amount you owe or pay defined minimum proportion of the bill by a due date. The future credit card user should carefully study every credit card deal and revise his or her payment possibilities to suit. There are a lot of advantages. Advantages of credit cards: Credit card reduces need to carry cash or checks. A credit card means you don't need to carry huge amounts of cash around and risk losing it. If you make an unforeseen, large purchase, credit allows you to buy it at once and settle up later. Besides it gives you the opportunity to spread the cost of a large payment over several months. As well as convenient, accessible credit, credit companies offer consumers flexible rewards schemesin which points earned by purchasing goods with the card can be redeemed for further goods and services. A credit card means you can make purchases abroad without having to worry about local currency. They have now spread worldwide. Using credit cards can help you build a positive credit history. Having a good credit history is also very important, when the credit card owner is applying for loans, rental or even jobs. Many credit cards offer some type of insurance if your purchase is stolen. Some credit companies provide extended warrantees on certain types of purchases. In general, credit cards enhance our personal responsibility and independence. Many of these advantages are found in the fine print of your statement that came with the credit card. Make sure you understand how everything works because the benefits differ from card to card. Of course this only works because many people do not pay their balance at the end of the month. If nobody carried a balance, the banks would be

More about Advantages and Disadvantages of Credit Cards

Open Document