The Great Credit Card Debate: What Are the Pros and Cons of Credit Cards?

Credit cards can be a great budgeting tool for spreading the burden of big purchases, but they aren’t the right choice for everyone. Here are some of the pros and cons of having a credit card.
 

The pros of having a credit card

Credit cards promise your card provider you’ll pay back whatever expenses you put on the card, usually with some interest added to the balance.

• When used correctly and responsibly, they can raise your credit score. A good credit score will get you better interest rates, more accessible and faster loan approval, and more.
   
• You can also enjoy convenience with a credit card. If you don’t have the money for a purchase right now but know you will in the future (for example, on payday in a couple of weeks), then you can use a credit card.
   
• Credit cards let you pay for a purchase over a few monthly installments, which cushions the financial blow that a significant purchase lands.
   
• Many credit cards offer a period of 0% interest where you pay no interest as long as you repay the monthly minimums.
   
• Credit cards have many perks and benefits like discounts at certain retailers, point programs, or cash back.
   
• Credit cards give you a useful and detailed record of your spending.
   
• Most credit cards come with purchase protection which you can use to dispute a charge or return a product that isn’t working.

 

The cons of having a credit card

• There’s a lot of temptation with credit cards, and it can be easy to overspend.
   
• If you cannot repay what you’ve borrowed, your debts can build quickly and suffer high-interest rates.
   
• Credit cards can also negatively impact your credit score if you miss repayments or build up debt, which can be damaging if you’re trying to get a loan in the future.
   
• Some credit cards have restrictions or extra charges for certain things, such as overseas purchases or ATM withdrawals.

 

How CreditBox can help

If you need a little more cash than you have right now but feel like credit cards aren’t suitable for you for any reason, then you can apply for a loan from CreditBox.
You can apply for online loans of up to $5,000. Get in touch with us for more info, or check out our FAQs here.