Credit cards explained
Credit cards are now an almost necessity for anyone who uses the Internet or who needs to do their grocery shopping, but unfortunately not many people are well versed on credit cards.
We look at some of the advantages and disadvantages of using credit cards.
The advantages of credit cards depending on which view point you aspire to, in some cases outweight the disadvantages.
First off credit cards are extremely convenient to not having to carry cash around, and saves many people who would have porbably lost their money or fidget endlessly for some change at the checkout (we’ve all been there).
Credit card especially with so many banks providing them; can be quite good for the benefits they bering, such as airmiles for free trips, there is almost an addiction amongst those who work with international companies to create a rivalry amongst themselves as to who can get the most air miles, and voucher points for using the card, it comes as no surprise that large transactions are carried out via credit cards.
Credit cards can only be useful to obtain cash (although this practice is not recommended as the interest rates can be quite astronomical) when stranded, or when the nearest cash macine is miles away, you can simply ask at the grocery store for some cash back.
More importantly having a credit card establishes a line of credit which will become extremely useful at stages of your life such as applying for a loan, or a mortgage, as having a credit rating is fundamental to obtaining this, and having a credit card boosts your application as you are already someone that can be trusted with credit.
The disadvantages as many people are familiar with is the various charges on the card, from late payment fees, to over limit fees, to cash withdrawals fees, the charges can seemoverwhelming especially when an introductory period ends.
Another major disadvantage is not a lot of people pay attention to the small print of the terms of their credit cards, terms such as the order of payment, which many assume simply goes towards their exisitng balance, not knowing many credit cards apply the payments with the lowest interst charge first, leavig the higher interest debt accumulating more interest.
A further disadvantage is once the promotional period on the credit card runs out, usually in about a year to fifteen months, if there is no money to clear the balance or exceed the minimum payments the charges could suddenly seem daunting especially with a host of credit cards, many people are tempted to obtain.
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Filed under: credit cards for bad credit