Credit Card: Comprehensive Guide to Pros and Cons

Credit Card Pros & Cons

Credit card is a kind of plastic money (plastic card) issued by a bank or financial company to people. It allows a credit card holder to buy goods and services on credit. There is condition between the cardholder and Credit Card Provider Company. Credit card holder needs to pay the borrowed money back with the fees & additional amount if there is any. There is a fixed amount which a credit cards holder can spend and need to pay back in order to reuse the given amount.

The credit cards is different than any other card which needs to research every month. Here with the credit card a user has access to the certain amount of money they can spend and later need to pay back in full or in the form of EMIs which also include few types of fees and interest. A credit card is a widely used plastic card these days. It gives cashback offers and some other occasional offers which attract people to use this type of cards. There are a few advantages (pros) and disadvantages (cons) of a credit cards.

Types of Credit Card offered by Bank

1. Business or Commercial Credit Cards:

These type of credit cards are specially offered to business owners and the executive and have the most of the features like the one standard credit cards have. It has some of the special offers and benefits exclusive to the business world. Also, business credit cards have higher credit limit compare to standard one. All the credit cards have some specific features and offers. You should check the terms and conditions of the card before applying for business credit cards.

2. Personal use Credit Cards:

There are so many credit cards offered by the bank for personal use few of common names are travel credit cards, fuel credit cards, shopping credit cards, premium credit cards etc.

3. Student Credit Cards

Some of the credit cards offered by banks are exclusively for the student and there are some of the special benefits for the students. Students can get extra discount by using these credit cards.

Common Features or Pros of Credit Cards

  1. Balance Transfer Benefits: By using this features you can transfer the one credit cards outstanding balance to other credit cards and get the benefits of the billing
  2. Rewards Points: When you spend money using your credit card the banks offer rewards points you can use these rewards points to adjust in your statement or can get some other benefits.
  3. Cash Back benefits: Some of the credit cards offered by banks gives you benefits of cash back which means you will get some percentage of your total amount.
  4. Low-interest rate benefits: Some of the banks offer a low-interest rate on their credit cards to benefits the customer.
  5. Travel and hotel reward points: Few of the credit card specially designed to travel and hotel booking rewash. You can get the reward points while booking a hotel or flight, train and bus tickets.
  6. Rewards points for airline ticket booking: This type of credit card is specially designed for airlines tickets. Bank offers a huge discount if you book your air ticket using these credit card.
  7. Retails rewards points: When you spend through local shops and outlets than also some of the bank’s credit card offers reward points.
  8. No Annual fee benefits: Some of the credit cards are premium and some of them are free of cost that means no annual fees.
  9. Prepaid credit cards: There are some of the credit cards offer prepaid benefits.
  10. Secured credit cards: Nowadays all the credit cards are secured than also some of the credit cards offer more security features.
  11. Gas rewards point credit cards: These are the credit cards specially designed for the purpose of gas rewards. When you use these type of credit card to refill your gas you can get huge discounts or rewards points.

Cons of Credit Card

When anyone does not use credit cards carefully it can be very harmful to them. Here are some of the cons mentioned below:

  • A credit card can make you spend more than required
  • You will be spending on things which are not necessary because the funds are available in your card
  • By easy availability of money to you can make you careless regards money and your personal finance.
  • You might be rewarding yourself again and again because of the money laying on your card.
  • By using a credit cards you can destroy your monthly budget and spend more.
  • Sometimes the cost of the things is more by paying through credit card.
  • Sometimes credit card cost you more including the fees of a credit
  • When you use a credit cards it destroys your future income because it is like you are borrowing money.
  • You can lose money if fails to replay on time by paying interest on the money you spend.
  • It is difficult to get the loan in future if you are not paying your credit cards balance on time.

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