Advantages and disadvantages of credit cards

Advantages and disadvantages of credit cards

A credit card is an automatic advanced card, when you have used it, you can get the goods you have purchased without paying for them yet. Credit cards are a widely used source of convenient credit for restaurants, hotels, mail order, online shopping, gas stations, grocery stores, dental and medical care, church bazaars, and products advertised over the phone and on television. There are many advantages and disadvantages to using credit cards, but the consequences of misuse can be drastic and painful.


Credit cards eliminate the need to carry large amounts of cash

If you’re away from home without cash, you can often get a cash advance or be able to buy traveler’s checks with a credit card

Places that are suspicious of personal checks often accept credit cards.

Credit cards act as a short-term loan if you find something that’s a good deal and don’t have the cash or checking account balance to pay for it.

If you move to a new place, credit cards give you purchasing power until you establish yourself as a good risk in a new community.

If you charge an item or service that costs $50 or more in Colorado (or within 100 miles of your home) and later discover that it doesn’t work or has other problems, you can put a hold on the payment from your credit card company if you tried to resolve the issue with the merchant.

You often get the best exchange rates when traveling in foreign countries if you use your credit card to make purchases and your ATM card to get cash. Check with your card issuers about additional fees before you travel. A surcharge of two to three percent can eliminate this advantage.

Credit cards can help coordinate receipts for tax purposes.

Accounting comes down to one monthly bill as opposed to checks.


Some people have been scammed by giving their credit card numbers to rogue telephone salespeople.

It becomes a loan when the loan becomes due and you don’t pay it.

Adding monthly interest means you pay more for goods and services.

Consumers often have more than one credit card and each has a credit limit. When the credit limits for all the cards are added up, the total can be in the thousands of dollars. Consumers can get into the habit of using credit cards to increase their income.

Credit cards are easier to use than applying for loans, even when a loan from a credit union, bank or other financial institution can provide the funds at a lower interest rate.

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