Advantages and disadvantages of having credit cards

What are the advantages and benefits of credit cards

Advantages and disadvantages of having credit cards

There is much risk in the indiscriminate use of the card. Risk of jeopardizing your future in an often irreparably. It is one of the greatest temptations of modern life. It must be used with extreme caution!

The credit card is a form of electronic payment. It appeared in the United States in the 20s and was offered only to select customers for their loyalty to the financial institution. But it was in 1950, when Frank MacNamara was in a restaurant in New York and realized he had forgotten his money and your checkbook to pay the bill. Then he had the idea of creating a card that contains the name of the owner as credit guarantee, and that after a time the card owner could pay off the debt…

Advantages and disadvantages of having credit cards

Who provides a credit card is actually financing the cardholder and also the supplier of the goods that is changing hands. But do not be fooled into thinking that by not having to pay the bill immediately be easier. Having credit cards have their advantages and disadvantages, so it is important to be aware of their financial control sheet.

Learn about the benefits of credit cards:

  • Convenience: This is an advantage that attracts many fans to the cards for the convenience and safety of not having to carry cash in your wallet.
  • Unforeseen: credit card, as we saw earlier, was designed for emergency or unexpected moments that has not the money to make a payment that was not scheduled.
  • Deadline for payment: This is an interesting advantage to hiring credit department of a bank because this pay your bill and hopes in some cases up to 40 days to get the money back. Or offers the advantage of piecemeal your purchase at several times.
  • international use: it is a good advantage for people traveling to other countries, because it avoids the exchange of exchange and possible losses.
  • Benefits and awards: competition is very healthy for the consumer because it makes the funding offer various benefits to attract more customers as discounts, bonuses and accumulated miles that can be rolled back in cash, purchases and airline tickets.
  • Credit immediately: the credit card also offers the advantage that once approved will not be required many other collateral as surety, promissory among others.

Disadvantages of credit cards

These are linked more directly to the behavior of cardholders than to what he offers as a risk. For it is the decision of who holds the control so that it does not become a nightmare. So beware:

  • Not find that credit card means spending without limits, remember that you have to pay off your debt is to run or once. Do not forget that 30 or 40 days pass and the bill should be paid.
  • Plan to pay the full bill. The alternative of paying the minimum and accumulate the rest for the next month can be a big trap, do not be fooled into thinking that push for another 30 days the payment will be a good choice, interest in this case are extremely high.

The idea Frank McNamara was a good outlet at the time, and today is the solution for many. But it can also be the destruction and fall of many others if they are not aware of the care to maintain adequate financial control.

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