Wants to own a credit card? What are the pros and cons of a credit card? Here are the 5 Advantages And 5 Disadvantages Of Credit Card.
Credit cards are come with a big responsibility. You can own a credit card if you’re a salaried person or you have a regular income. Given below are the benefits and disadvantages of credit card.
Credit Card Advantages
1. Discounts And Offers
One of the biggest advantage of credit card is discount and offers. You will get 3% to 5% shopping discount, 4 to 5% other discount. Free lounge Access, gifts, other offers, dining offers and many other credit card offers.
2. Pre Money
You have the advantage of free money or advance cash with a credit card. You can use credit card in emergency or any other situation. So no need to go to bank.
3. Credit Score
Credit cards help you to build a better credit score. A good credit score helps you to get loans in future. You should use your credit card properly to get a good credit score.
4. EMI Benefit
One more Pros of credit cards is EMI benefit. EMI option is cheaper than Bank loan. You can use your credit card on big amount purchases. Also, you can enjoy discounts on your credit card.
5. Purchase Protection
Credit cards are come with a good purchase protection policy. You can also apply for credit card insurance. You will get priority, if your credit card lost, damaged or stolen.
Also Read Amazon Credit Card Vs Flipkart Credit Card
Credit Card Disadvantages
1. Minimum Due Trap
Minimum due trap are one of the biggest fear of credit card holders. Many people’s thinks minimum due are the full amount, so they failed to pay the full amount. And gets many penalties.
2. Hidden Costs
Many credit cards are come with hidden costs. Many people forgets to check processing fees, tax, surcharges, penalty fees, lost fees, late fees, and many other hidden costs, As a result, they will end up with big penalties.
3. Fees
Mostly credit cards are come with joining fees and annual fees. These fees becomes headache for many peoples. Some cards are also come with zero joining fees and zero annual fees.
4. Overuse Issue
Over usage is the biggest failure of credit card holders. Due to the credit card, many people spends blindly. This overuse of credit card will down their credit score and invites many taxes.
5. Interest Rate And Charges
It’s very hard to manage credit cards. Some big problem of credit cards are high late fees after period time. You have to pay 3% to 35% if you are fail to pay the amount in a period time. ATM withdrawals with credit cards are also attracts big charges.
So these are the 5 Advantages And 5 Disadvantages Of Credit Card. You should remember these pros and cons of credit card before applying.
5 Must Credit Card Advices
- Don’t apply for a credit card if you are not salaried or good income person. Also, you must agree on above advantages and disadvantages.
- Always read Terms & condition and hidden cost of credit card before applying.
- Don’t overuse your credit card, Always use 50% to 60% of credit limit.
- Always protect your credit card, New credit card attract big charges.
- Control yourself while using credit card. Never drop your credit score.