Pros and Cons of Credit Cards

Credit cards have been given good and bad names ever since they were first offered.  Many individuals think that credit cards are traps that can get you into real debt, but there are two sides to every story.  In this article we are going to look at the pros and cons of credit cards to help you decide for yourself.

PROS

• A credit card can be used to purchase something you don’t have the money for at that moment, but will have the money for before the bill comes due.
• A credit card can help you get your credit rating back up to the good standing or higher by using it wisely. 
• If you pay off the balance every month with a credit card you will not be charged interest.  You will also get a 56 day interest free period with most cards on the market at the moment.
• A credit card can be used for purchase out of the country like over the internet to buy a present.
• Credit cards can be used for travel.  In fact many companies like hotels, airlines, and rental cars will only rent if you have a credit card.
• Credit cards have identity theft protection meaning if your identity is stolen or the card is used the bank is liable for the charges and not you.
• There are rewards such as discounts, flight miles, and introductory deals that can save you money.

CONS

• A credit card can lead to a severe debt.
• Credit cards have high interest rates that make paying back the money you borrowed extremely expensive.
• Using a rewards card can have you spending more money that you wanted to just to get the discount.
• You earn flight miles rather slowly.
• Using the balance transfer and purchase introductory rate option at the same time will not save you money.  The balance transfer will be paid off first, sometimes leaving you to pay interest on the purchases you have made.
• There are fees associated with credit cards such as overdraft, late payments, missed payments, cash withdrawals that when you add them up is very expensive.

After looking at our list of pros and cons you may think a credit card isn’t something you want or need.  The truth is there are some cons that make them look horrible, such as hidden or fine print terms and conditions.  However, when you know the dangers of the card you don’t have to fall into the trap.  If you are wise in using your credit card such as paying off the balance every month, or using a card only as a balance transfer option until you pay it off completely you are truly saving money.  By researching the credit cards that are out there and the different deals you can find a card that can help you.  Rebuilding your credit is important if you have had issues and credit cards allow for this option a little faster than others.