The advantages and disadvantages of credit cards

advantage and disadvantage of credit cards

Credit cards can prove to be a real gift if used properly, it can help you to borrow money for almost nothing while increasing the safety that comes with your purchase. You can even garner points or get cash back on purchases; the only key for all this is to use a credit card correctly because if you do not do that the flip side can be real ugly, filled with debts and towering interest rates.

There are times when we want something that turns out to be so pricey that we can not pay for it at one go in such a situation credit card can be your real savior. The way this thing works is when you do not have enough cash on you or even in your savings account than in that situation you can make a payment via credit card and then spread this borrowed amount over a span of several months.

Credit cards are a very feasible option when you are shopping online simply because it is accepted almost everywhere and is safer than most other options like debit cards or cash. There is a possibility that when you order something it does not turnup or is defective when delivered. In such a case, you can claim for the payment you made from the provider of your credit card the only condition is that the cost of the product has to be between $100 to $60,260. Credit cards even provide you protection from fraudsters who may misuse your card.  The protection offered is in such a way that if your card is used by someone else without your permission then you can make a claim to the money lost from your provider but make sure the fraud did not get access to the PIN because of your negligence in which case you will lose your claim.

Choosing the right thing at the right time is very essential, in case if you have big expenses heading your way then what you need is a card that offers 0%. Also, the card should be such that gets you points or cash backs whenever you use it.

You also need to be well aware of the charges that a credit card can incur on you as the interest rate that it will bring along with the money that you borrowed. Not only this but whenever you are late in making a payment you will have to pay the penalty charges as well. There is also provision where if you exceed the limit of your credit card you will have to pay certain charges. Understand that it is important for you to make payments timely. There will be many offers, but it is better if you refrain from taking out cash from ATM as it will incur 2-% charges and also interest rates are high when you withdraw cash.

When using credit cards essentially keep in mind that you are borrowing money and that you have to return it, if you continue to ignore your debt then the pile is going to become mountain high and can land you in terrible trouble. The minimum amount that you have to pay monthly is not going to be enough, try and pay more than that.

There are certain credit plans that offer as low as 0-% interest charges. However, these are few and hence you should calculate things keeping in mind the usual rate which is 18%, which is high and hence all the more reason for you to make payments on time. When you borrow something on credit, you get on an average 59 days to pay it back. There are cards that will reward you with points if you spend via credit card.

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