- Advantages of Credit Card
- A quick source of funds in an emergency
- Cash can also be withdrawn
- Free loan for a Fixed Period of Time
- Build Good Credit Score
- Cashback and Rewards
- Disadvantages of Credit Card
- Interest Charges
- Revolving card
- Hidden Taxes and Fees
- Use limited
- Avoid taking on too much debt
- Check Monthly
It is a thin rectangular piece of plastic or metal issued by a bank or financial services company.
A credit card is a type of payment card that allows us to borrow. If you have a good credit score, you can buy more. When a credit card user uses a credit card to make a purchase, a balance is credited to that person’s account or it is assumed that the purchase you just made is paid for by that bank.
Bank whose credit card is there. You can pay this amount up to a certain time, it is given by the bank, but the thing to keep in mind is that if you have not paid the amount within the stipulated time then you will have to pay that amount within the stipulated time. will have to pay. Otherwise you may incur interest charges and late fees, which have very high interest charges.
Credit cards can also help users build a positive credit history.As we have already mentioned, the more credit a person has, the more purchases he can make using credit as he becomes more trusted by lenders and banks.
If the credit card holder makes full payment of his statement balance every month, he can expect his credit score to rise. In addition, almost all credit cards come with some sort of rewards program and also offer cashback.
This is exactly the same as a debit card, but the only difference is that through a debit card, you can spend only that amount as you have in your account, but this is not the case with a credit card. In the credit card, you are given a limit amount by the bank, if you want, you can spend that amount in 1 month. This amount can be so much more than the amount present in your bank account that you can complete your shopping with that amount.
Advantages of Credit Card
A quick source of funds in an emergency
Suppose you have to buy an expensive item but you do not have that much money in your account, then you can use a credit card and through this you can buy that item at the same time. Hence it can be considered as a quick source of funds in case of emergency.
Cash can also be withdrawn
If you want, you can also withdraw cash and pay through credit card, but doing so attracts high interest rates, so it is better that you do not withdraw cash and pay online then it will be better for you.
Free loan for a Fixed Period of Time
The biggest advantage is that you go interest free after the purchase. Because many credit cards offer a 0% interest period, as long as you make your minimum monthly payment, you can borrow for free without any interest.
Build Good Credit Score
With the amount you make purchases and pay that amount within the stipulated time, you will become a trustworthy character of the bank. And credit rating agencies will help you get a good credit rate which will increase the chances of lenders lending you more. This means you will be able to shop more.
Cashback and Rewards
One of the best advantages of credit cards is that many credit card providers offer customers a variety of great rewards that you can take advantage of, such as cashback when you use your card or make purchases using a credit card. See also It is very much liked by the credit card users.
Disadvantages of Credit Card
If you buy something through a credit card and do not pay it within the stipulated time, you will not only pay the purchase price, but you will also pay interest charges on the item that you purchased. It can also be understood in this way that you have a cash amount, if you buy any item, then you will not get that item at the rate as it is. That item will cost you a little.
With this credit card, your bank balance remains the same, this may be because you can make more purchases with the credit card. And with the bank balance remaining the same, you may be unaware of how much you owe is due. That could cost you more, and may lead to a cycle of debt and higher interest rates on your future payments if you owe more than you can pay.
Hidden Taxes and Fees
You may find credit cards simple and straightforward in the beginning, but there are hidden charges that you need to be aware of that can add up to your overall spending. This credit card comes with a variety of taxes and fees, such as late payment charges, joining charges, renewal fees, and processing fees. Non-payment of credit cards can also result in penalties and your credit limit can drop if you are making frequent late payments, which will adversely affect your credit score and future credit prospects.
The people (banks) who are providing you with credit cards may charge you extra for things you get free of charge with a debit card like withdrawing cash from ATMs or buying things abroad. Therefore it should be used with great care and limited.
Avoid taking on too much debt
Borrow only what you can repay. If you can’t pay back what you borrowed, you could get into debt very quickly. And if you have bad credit, you may be hit with high interest rates – and once you are stuck in mounting debt, it can be difficult for you to repay it.
You should check your bill every month to see if it accurately reflects your purchases and there are no signs of fraudulent use of your card. After doing this you can rest assured that you are not being cheated.
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