Credit Cards Pros and Cons: What You Need to Know


Credit cards are becoming an indispensable part of our lives because of how easy they are to use and the useful pay-back option they offer. A credit card is a gold mine for the knowledgeable user and offers discounts, bonuses, and deals unmatched by any other financial item. But, if used incorrectly or if you charge more than you can afford to pay back when the bill comes, credit cards may become debt traps.


If you are new to the world of credit, the advantages and disadvantages of your small plastic card are listed below.


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Advantages of Credit Card


Buying on credit 

People are drawn to using credit cards because of the potential credit limit. At that pricing range, you may purchase anything and pay afterwards. Even if you use credit to buy pricey items, it won’t affect your monthly spending plan.


One of the most significant benefits of having a credit card is the option to break up the cost of your purchases into manageable EMIs so you can pay it back over time without difficulty. This has helped fuel a revolution in retail.



Just swipe your card to pay for items rather than carrying a lot of cash. One of the easiest ways to pay for anything is with a credit card. Just show the plastic instead of writing checks or adding up coins. 


Connecting your card to your digital wallet allows you to scan barcodes and make transactions even if you don’t keep your card in your wallet.


Recurring payments

Credit cards are great for one-time purchases, but you can also use them to set up recurring payments for things like your gas, electricity, or phone bills. There won’t be a chance that you’ll fail to pay a bill on time and end up paying late fees or getting disconnected.


Ease travel 

Due to their use in travel, credit cards are essential. Priority check-in and free lounge access at Indian airports and train stations are two benefits of using Bank credit cards. Also, you may save money on food at restaurants.


Boost your credit score

Beyond only allowing you to make purchases on credit, credit cards also help you improve your credit score. By using credit cards responsibly, taking advantage of the grace period, and paying the bill off quickly, you may raise your  CIBIL Score. As a result, you will be able to obtain loans in the future without any issues.


Interest-free credit

Between the time of purchase and payment on a credit card, there is an interest-free grace period (which might last up to 50 days). The best example of purchase now, pay later is this.



The monthly statement and online account with a credit card provide a convenient spending record, just like if you used a debit card for transactions. Credit cards issue year-end summaries, which may be a handy tool for doing your taxes.


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Disadvantages Of Credit Card


Minimum due trap

A credit card’s biggest drawback is the minimum due amount shown at the top of a billing statement. Although many credit card users are duped into thinking it is the entire amount they must pay, the truth is that the minimum payment is the least amount the firm wants you to back to keep obtaining credit facilities.


Consumers overspend because they think their fee is minimal, which causes interest to accrue over time and grow to a large and unsustainable amount.


Hidden cost

Credit cards feature a lot of hidden fees that can significantly increase the entire cost, even though they first appear to be easy and uncomplicated. Among the taxes and charges associated with credit cards are late payment, membership, renewal, and processing fees.


Your credit score and future credit prospects may suffer if you often skip or make late payments on your cards, which might reduce your credit limit.


Interest charges

If you make a purchase but don’t pay it off immediately, you will be responsible for both the initial purchase amount and interest. In other words, if you have a balance, you will spend more on everything you buy.


Credit card fraud

Despite being rare, there is a chance that you might fall victim to credit card theft. Because of recent technological developments, it is now simple to replicate a card and get confidential information that would enable another person or business to use your card to make purchases.


Examine your statements carefully for unusual purchases, and notify the bank immediately. Banks often waive fees if fraud is proven, so the purchases the thief makes won’t be deducted from your account.


The appearance of Free Money

The perception that money is being handed away while using credit cards makes people more likely to overspend. As a result, credit card holders are encouraged to make pointless purchases.


Obviously, signing a paper differs from paying money for it. Those with trouble sticking to a budget are the ideal customers for credit card companies, and they know this.


The Risk of an Unpaid Balance

You only get a bill once a month, so it’s easy to forget how much you spent in the same time frame. Many people who use credit cards do more than they can reasonably afford to pay back at the end of the month. Because of the interest rate, a short-term debt problem might arise after only a few months of missed payments.



Obtaining a credit card would be the ideal decision if used correctly. One of the most well-liked and beneficial aspects of utilizing a credit card is its simplicity and luxury.


They also help you keep up a good financial history, which will ultimately be advantageous when you apply for loans in the future. To begin with, you must learn how to use your credit card responsibly. Your credit score will be badly damaged if you don’t do this.


You should get one in light of the advantages and disadvantages of having a credit card. As you go along, include routines like prompt payment of credit card bills and prudent usage of credit card charges. You’ll finally be able to utilize all of a credit card’s benefits if you do this.

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