Advantages and Disadvantages of Credit Card

Credit Cards should probably be renamed as the modern day fairy godmother’s magic wand. The way in which they work is simple. It allows an individual to pay in advance for goods and services that he purchases on the behalf of a promise that an individual shall pay back for them later. This system is convenient and effortless, but only if used judiciously. Lets us have a look how:

• They are convenient as one does not have to be bothered about carrying cash around everywhere. But then, since we carry them all the time, they tend to become victims of overuse thereby landing the cardholder in trouble. 

• Credit cards can be expert expense trackers. As all the payment is made through thecard, a copy of the receipt is given to the cardholder which means he can clearly make out what cost him how much. But this maintenance would mean storing up of all receipts for a period of time and that can involve too much paperwork.

• These cards are instant cash solutions as with one in your pocket, credit is never too far from you. The fee for this convenience is usually a 2-4% tax or interest charge that would not have been levied in case of cash payment.

• The perks of having a credit card cannot be denied – frequent flier miles, automobile discounts, incentive programs etc are just some examples. But as they say, there are no free lunches. So with the perks come high interest rates, annual fees and many more such charges. 

To know more about how beneficial or harmful a credit card may be for you, visit: http://www.atlanticus.com