There are about 189 million Americans who own credit cards. With credit cards being so prevalent, you may be thinking of getting them yourself.
But is applying for one right for you? Credit cards have a lot of advantages and disadvantages you’ll need to think about. Here are some of the pros and cons of credit cards you should know.
Pro: Fast and Easy to Use
One of the biggest advantages of using a credit card as opposed to paying with check or cash is that it’s very quick and easy. All you need to do is swipe your card and then you’re done! It literally takes a couple of seconds.
Pro: You’ll Have Emergency Funding
Emergencies can happen, and it’s nice to have the peace of mind of a credit card. Say, for example, you need to get from the east coast to the west coast as quickly as possible.
With a credit card, you could simply buy the tickets straight away, whether you can afford it or not. So long as you haven’t hit your limit, you’ll be good to go.
Pro: Earn Rewards
Using a credit card can often entitle you to many benefits. For example, some credit card users might be able to earn free flights or cash back.
If you’re in the market for a new credit card, it’s worth shopping around to make sure you get the best deals. This helpful post shows you how to make the most of your rewards.
Pro: Boost Your Credit
If you use credit cards properly and always make your payments on time, it can boost your credit rating significantly. In fact, sometimes it’s worth it to charge your purchases on the card then pay it off in order to boost your credit rating.
Con: Temptation to Overspend
It’s easy to spend too much money, especially when your limit keeps getting raised. Unfortunately, with a credit card, you can even spend money you don’t have, sending your account into the red.
Overspending on a credit card can have a domino effect, as you’ll need to pay back the money from your next paycheck.
Con: You Can Ruin Your Credit Score
Not only can credit cards leave you owing money, but they can also lead to a ruined credit score. When your credit score drops, it can create obstacles later on. For example, you might be refused a mortgage or a business loan.
Con: The Terms and Conditions Can Be Confusing
Often, the terms and conditions for credit cards can be tough to understand. This could lead to you inadvertently messing up your credit.
Weigh the Pros and Cons of Credit Cards
As you can see, there are several pros and cons of credit cards to consider. The main question you need to ask yourself is whether or not you have the necessary self-control to use it correctly. If you do, it’s well worth getting one to increase your credit score.
On the other hand, if you think you’d be tempted to live well beyond your means, you might be better off not opening that can of worms.
Need money quick? Then read our blog post on quick personal loans.