About Pros & Cons of Credit Card Use

By Andrew Smith

  • Overview

    Chances are that practically every adult you know has a credit card. There are still people out there, though, who believe credit cards do far more harm than good. Those who use credit cards on a weekly or even daily basis would state that they cannot live without their credit cards.
  • Benefits

    Credit cards allow you to make purchases "on credit," meaning that you can buy items without having to pay for them the same day. This can be very useful when you are purchasing a larger, more expensive item or when you have to buy many things all at once (such as during the holiday season). Using credit cards also allows you to establish credit and increase your credit score. Having a good credit score will be very important when you want to take out a loan for a car or obtain a mortgage for a home.
  • Cons

    Since you don't have to pay off charges made on your credit card right away, acquiring a high amount of credit card debt is a very easy thing to do. This is made even worse by the fact that interest acquires on your debt each month. Interest on most credit cards will go up after you have the card for a certain amount of time, making it even more difficult to pay off your debt. Missing a payment on your credit card(s) will cost you in penalties and an increased interest rate.

  • Misconceptions

    Many credit cards will promise a low "Introductory APR" for a certain amount of time. You may not know that companies can change their policy and increase the APR on your card at anytime. They can also lower the limit on your card (how much money you can spend using your card) without notifying you ahead of time. Missing one payment on your credit card will not "drastically" lower your credit score or ruin your standing with the credit card company. As long as you pay the penalty that you incur and make consistent payments on the card, you will be fine.
  • Warning

    Read all of the "fine print" that comes with your credit card before you use the card. Doing so will help to prevent you from being surprised by any changes in interest rate or "mystery charges" that appear on your credit card bill. You should also be careful when using credit cards with higher spending amounts. It may be easier than you think to fill up a card that allows you to acquire thousands of dollars of debt at one time. You should beware of having too many credit cards. Otherwise, you may end up paying hundreds of dollars on several cards each month.
  • Expert Insight

    You won't have any problems with credit cards or credit card debt as long as you use them safely and responsibly. Create a budget for your credit card use and stay within that budget. One way to remain safe is to keep your credit card debt under $1000. This will allow you to manage your debt easily each month and keep you from getting in over your head. If you use your credit cards for Internet purchases, be sure to use them only on websites that you trust. You should also use both anti-virus and anti-spyware/adware software. Both of these steps will help to keep your identity and personal information safe.
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