Pros and Cons of Credit Cards

 


Visitors: 546

Credit cards are very convenient. There’s no need to carry any cash; you can just take a credit card with you to the shop and charge for your shopping.

When you shop on the Internet or over the phone, it’s the only good way to make purchases online. This is more convenient than posting a cheque for payment. Like anything convenient, though, having credit cards have its cons.

Not Keeping Track of Your Shopping Charges May Land You in Trouble.

When you walk into that shop and hand over the card, you don’t pay cash rightaway. This can mean that as you do not see less money in your purse or wallet, you may lose track of how much you’ve spent.

Everyone has a tendency to underestimate what they spend, and smaller amounts can add up quickly on a credit card without you even noticing. It’s like taking the way phone bills work and applying it to everything you buy – and that can’t be a good idea.

Also, imagine the scenario if you have more than one credit card. You will have to consolidate your charges on all of them as well as those on your debit cards to derive your total spending for the month.

You May Pay More Interest than Earn Interest.

The moment you run an outstanding balance, you’re paying the credit card company interest. You’re also paying your credit card bill as soon as you get your wages, so you may not have the chance to earn any interest from your bank balances.

You Charge More to Your Credit Cards to Earn More Reward Points.

The more debt you show you can pay back, the more credit card companies will offer to you in terms of limit and cash advances. The offers are so attractive that sometimes, it’s tempting to apply for more than one credit card. Credit card companies also try to make you charge more to credit card by awarding you reward points. The result is that you end up spending more as you get enticed by lucky draws, discounts for shopping, etc.

But Credit Cards If Used Wisely Can Be Useful.
When you need money in an emergency and you just don’t have any, there’s no doubt that credit cards can be useful. They are also a very useful way of proving to credit rating agencies that you can handle debt, and this may be taken into consideration when you apply for car loans or a mortgage.

Just remember that whenever you handle credit cards, you’ve got to learn how to manage your finances. Keep your loans to a minimum, and you will be in greater financial health.

Elaine Lim used to be a research analyst from a bank and now hopes to share her expertise through publishing information on consumer credit. She aims to help others in their financial planning, debt management and credit repair. For more free tips, articles and resources, please visit http://www.credit-cards-eguide.com .

(555)

Article Source:


 
Rate this Article: 
 
The Pros and Cons of Owning Multiple Credit Cards
Rated 4 / 5
based on 5 votes
ArticleSlash

Related Articles:

Credit Cards: Pros and Cons

by: Jeffrey Altmire (April 20, 2005) 
(Finance/Credit)

The Pros and Cons of Subprime Credit Cards

by: Tina Porter (January 03, 2008) 
(Finance/Credit)

Credit Cards – Pros & Cons

by: James Hunaban (November 21, 2006) 
(Finance)

Prepaid Credit Cards Pros and Cons

by: Jitesh Arora (August 13, 2008) 
(Finance/Credit)

Student Credit Cards Pros and Cons

by: Damien Cheney (September 30, 2005) 
(Finance/Credit)

The Pros And Cons Of Prepaid Credit Cards

by: Richard Gilliland (June 15, 2007) 
(Finance/Credit)

The Pros and Cons of Credit Cards and Loans For Those With Damaged Credit

by: Brendan Flushing (August 26, 2008) 
(Finance/Loans)

Should College Students Have Credit Cards? The Pros and Cons

by: James Griffiths (July 07, 2008) 
(Finance/Credit)

What Are the Pros and Cons of Low Interest Credit Cards

by: Michael Radika (July 19, 2008) 
(Finance/Credit)

The Pros and Cons of Owning Multiple Credit Cards

by: Matthew Lloyd (May 29, 2007) 
(Finance)