Advantages and Disadvantages of Credit

Being a credit card holder can have numerous advantages and disadvantages. It depends highly on each individual card holder as to whether or not credit cards are friend or foe. Advantages: Credit cards eliminate having to carry large amounts of cash on hand. In times of need such as sudden illness, unemployment, or family deaths you can borrow money from a creditor. Credit cards allow for larger purchases to become a reality for those that are not the best at saving their money. In todays world credit cards are an end to a means. Nowdays due to accident, vandals, and irresponsible people and crime most car rental company or hotel chains will not allow you to even book a reservation without a credit card. Credit cards are accepted worldwide. Credit card bills summarize all of your monthy purchases so it is easier to maintain records of where all your money is going. Where with cash this is not the case. Disadvantages: Finance charges. If you dont pay off your monthly balance every month added fees are tacked on. Most consumers will spend twice as much money on a purchase when they know that the money is not coming directly from their pockets at that very moment. Credit card fraud. Criminals can rack of thousands of dollars in your name on credit cards where with cash they can not. Psychologically, people can find themselves caught in the buy-now, pay-later cycle. There’s the tendency to spend more money when charging items rather than just paying cash.

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