Disadvantages And Advantages Of Using A Credit Card That Needs To Be Understood – Viral.Spot72 Explored

August 12, 2022 0 By Cypher9ja

Disadvantages and advantages of using a credit card that needs to be understood – Viral.Spot72
– #Disadvantages #advantages #credit #card #understood #Viral.Spot72

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Viral.Spot72.com – Having a credit card is more like a standing symbol. If you have it, no one cares, but it’s like a sin if you don’t have it.

People keep more than one card in their wallet. But what’s the fuss around it?

People who don’t have a credit card and are considering having one often have the question – should I get a credit card?

You can do everything you can with a credit card and debit card. So, why have a credit card?

Like almost anything under the sun, having a credit card has its pros and cons.

Let’s discuss the advantages and disadvantages of credit cards and consider whether you want one.

Credit Cards: Overview Credit cards are pre-approved lines of credit. This means having a pre-sanction limit.

You can use the card up to the limit for any transaction. You can use the card for booking resorts, restaurants, gas stations, online shopping, etc.

Once used, the credit card will have a fee. You need to remove dues or minimum amount due after a certain period of time.

If you fail to pay the amount due within that period, you will only have to pay a fee for it.

So even if you don’t have enough money in your account for a certain period of time, you can still buy it and pay it back once you receive the funds.

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Advantages of a credit card

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Disadvantages and advantages of using a credit card that needs to be understood

Frankly, the advantages of having a credit card are many. It is the line of credit of choice for billions of people. Let’s look at the benefits first.

1. Buy Now Pay Later

This is perhaps the second most compelling reason to have a credit card, it has two advantages.

First, it is an additional line of credit for cardholders.

In case of an emergency, significant expense, or special occasions, you don’t have to break fixed deposits or take out expensive personal loans. You just pay with your credit card.

Second, because you have to pay almost a month later, you will continue to earn interest on that amount.

Also, you can pay the amount in EMI as well. So you don’t have to pay the entire amount at once.

2. Security

In case of web fraud or theft, debit card money is directly debited from your account.

Then you have to follow up with the bank for medication. However, for credit cards, the money will be deducted after a month, so you can block transactions while the bank is investigating.

3. Poin Reward

Credit card companies provide attractive benefits in terms of Reward Points and cashback.

You can redeem your reward Points for awesome gifts and merchandise.

And in the case of cashback, the money is instantly credited back to your account. For example, for paying utility bills, some credit card companies provide INR 50/- direct cashback.

This is a very good benefit of having a credit card.

4. Manage separate Accounts for different purposes

This is especially beneficial for sole proprietors of small and medium-sized business holders and for salaried people who don’t get a card from the office but have to travel a lot legally.

Keeping separate accounts helps better manage accounts. For example, if you are going for an office tour, you can use your credit card.

So when you submit a bill, you can easily separate the cost of the tour from your personal expenses.

5. Manage a good credit history

This is the most significant benefit of having a credit card. Credit history, like CIBIL score, is very important when applying for a loan.

This can determine your eligibility for the loan, the loan amount, and even the interest rate.

People with bad credit history pay higher interest rates. Managing credit cards responsibly helps you have a good credit score.

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Lack of credit card

It’s not all rosy to have a credit card. There are drawbacks too. Let’s discuss some of the disadvantages of having a credit card that you may have:

1. Overproduction

Because you don’t have to pay right away, you may end up spending more than you can afford.

For example, you can go to the store to buy a fridge and buy a 48″ TV and microwave oven along with the fridge.

It’s human nature, which can be a big problem, especially when you’re buying on-line with a credit card.

2. Minimum Payout Loop

This is related to the first point of loss. Credit card companies offer that a minimum amount can be paid off your total bill, and the rest you can pay later.

People fall into the trap of overspending and paying high rates of interest to credit card companies.

3. High Interest Rate

The interest rate on the amount due can be very high with a credit card.

This is higher than a personal loan and can go up to 50% per annum (Annual Percentage Rate or APR).

So, if you fail to pay your bills, you end up paying a lot of money as the interest rate.

4. Credit Card hidden fees

Nothing is free in life. That goes for credit cards too. Even with a ‘free lifetime credit card’, there are associated fees that will be activated in certain situations.

So if you don’t read the good points, you pay extra.


So, what’s the verdict? Are credit cards useful? Do the advantages outweigh the disadvantages? In my opinion, it’s not.

If you follow good discipline in keeping credit cards, your life will be much easier.

A few points you need to remember. Like, you shouldn’t spend more than what you can payback.

Pay the total amount of the bill and not only the minimum amount due. Instead, you can choose the EMI option for large transactions.

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