7 advantages and disadvantages of credit cards

This is a number of advantages and disadvantages of credit cards that must be known by its users. Get to know before wearing.

Credit cards are often considered to be a practical solution when you want to shop or pay bills without spending cash.

However, behind all these facilities, there are responsibilities that cannot be considered. Once a wrong step, debt can accumulate and make prolonged stress.

Conversely, if you understand how to use it, credit cards can help you in achieving better financial goals.

In order not to make the wrong decision, it is important to know the advantages and disadvantages of credit cards. Come on, talk one by one with a style that you can easily understand.

Blog Skillife presents accurate information summarized from various trusted sources such as news portals and banking sites.

Excess credit card

1. Can buy first, pay later

One of the main advantages of credit cards is the flexibility in payment. Suitable when you face emergency needs, such as vehicle repair or buying sudden medicine.

However, not to fall asleep, the bill must still be paid before maturity so as not to be hit by flowers. Moreover, if you only pay Minimum payment.

2. Promo, Cashback, and Reward Points

Credit cards often offer attractive promos ranging from restaurant discounts, Cashbackuntil prize point. Things that can’t be obtained if you pay cash.

If used intelligently, this advantage can be very profitable. Especially for those of you who often shop on line or traveling.

3. Security when transacting

Transactions with credit cards are safer because they are equipped with fraud detection systems and automatic blocking features when the card is lost.

If there is a suspicious transaction, the card issuing bank usually contacts you directly. So the card owner doesn’t need to worry.

4. Building a Credit History

The use of a good credit card will form a positive financial reputation. This is important when you plan to take vehicle installments, KPR (Home Ownership Credit), or other loans.

The advantage of this credit card is often felt when you need access to large loans. The bank sees you regularly pay installments so that the credit score is good.

Lack of credit cards

1. Hidden additional costs

There are many costs behind credit cards, ranging from annual fees, late interest rates, to cash withdrawals. The amount is quite large.

If it is not considered from the beginning, the bill can swell unconsciously. Credit card owners must find out.

2. Effect on Credit Score

Late paying a credit card can reduce the credit score. This has a direct impact on the possibility of approved when applying for a new loan, especially if you want to apply for a mortgage.

So, it is important to always pay on time and not exceed the credit card limit. Get used to check bills every month.

3. Risk of consumptive lifestyle

Ease of friction without cash sometimes makes us forget ourselves. Many people are finally trapped in debt because they use credit cards too often for their needs No Very important.

Moreover, if you can’t hold back when there is a discount of goods in a shopping center or Market. All items want to be purchased.

Well, this is one of the advantages and disadvantages of credit cards that most often occur in real life. Maybe you’ve experienced it.

Need to have a credit card?

The answer depends on your financial condition and discipline. If you already have a fixed income and can manage expenses, credit cards can be very helpful.

However, if it is still impulsive and often shopping without a plan, it’s better to postpone it first. Credit cards are not enemies, but also not toys.

Understand carefully the advantages and disadvantages of credit cards before you decide to apply to the issuing bank.

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