Pros And Cons Of Credit Cards

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.


About The Author: 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 hopes to help others in
their financial planning, debt management and credit repair.
For more free tips and resources, please visit
http://www.credit-cards-eguide.com .
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