Is Credit Card Worth It?

With the passing of time, Credit card has taken over all over the world. This little plastic card has offered so many exciting and exclusive offers and deals to cardmembers. A credit card is like a coin, it has two sides one that can bear fruits and the other one that can lead you to the debt trap. Results of both sides depend upon the cardholder’s usage.

Here are the pros and cons of a credit card:

Pros of owning a credit card

1. Owning a credit card allows you to borrow funds from a bank easily. This is the biggest advantage of a credit card, it makes funds readily available at any time and anywhere. Make payments using a credit card and pay the amount later.
2. It helps you to build a credit history that makes you eligible to get loans easily from the bank. Having a good credit score between 700–750 shows your credibility.
3. With credit cards, you can convert big spend into easy EMIs. you don’t have to pay the full amount in one go, you can choose to repay in smaller amounts in this way it helps you to retain funds than exhausting the entire bank balance. The EMI time frame can range from 3 months to 18 months.
4. Another advantage of having a credit card is that while you are spending you are earning reward points also. You can further redeem for online shopping, gifts, vouchers, and much more. Reward points vary from card to card.
5. You get a grace period in which you don’t have to pay any interest on the credit amount on repaying the due amount within that time frame. The grace period can range from 21–50 days.
6. Credit cards are much safer to use when making payments as they maintain the confidentiality of your credit account. Also in the worst-case scenario, your card gets lost then you can get it immediately blocked without having to worry about the misuse of the credit card.
7. It is easy to carry. You can take it anywhere. You don’t have to load yourself with cash.
8. It keeps a record of all your transactions. You can easily download the credit card statement and don’t have to maintain a physical register of your expenses.

Cons of owning a credit card

1. You may have no knowledge about all the hidden charges that a credit card can bring with it. You may think it is easy to use a credit card but if it is not used responsibly then the hidden charges can come back to bite you. Read on more to know about all the hidden charges a credit card can have.
2. It can possibly lead you to the debt trap.
3. You may get very comfortable using a credit card and there are high chances that you can overuse it and exceed the credit limit. With this being said, the gap between debt-to-income ratios can increase which will lead you to a debt trap.
4. If you do not repay your credit card bills on time then there are high chances that you can be charged with a high rate of interest which again can push you towards the debt trap.
5. Credit card’s fraud is on the rise. It is very easy to make a duplicate credit card and get access to your confidential information. So, keep a check on your credit card statement, and in case you find any fraudulent transaction report it immediately to the bank.

Bottom Line

With a parting thought, we can conclude that it is worth owning a credit card only if it is used sensibly and responsibly. The advantage of owning a credit card is that it is convenient to use and carry. Also, do not indulge yourself in over-using it as it can lead you to a debt trap. Keep your dues clear and you are good to go.