A credit card is a payment method that allows you to borrow money whenever you purchase or pay for a product or service. This is because the user spends the money but the amount spent will be reimbursed to the banking institution only the next month.

However, if the user fails to reimburse it, the banking institution will charge interest over the amount that was spent but not paid. But if the user can decide to reimburse the bank over time, a small portion of the total amount at a time. This is called an installment.

By having a credit card, the user will be entitled to a credit limit. And this limit will vary depending on her or his credit profile. The limit of a credit card is the total amount of the credit line that the card makes available. It is like a loan that is always available.

On one hand, this can facilitate your life. On the other, if you are not careful, you can get more in debt than when using your debit card. For this reason, this time we made a list of both the disadvantages and advantages of having a credit card.

A credit card is an excellent tool that opens up many possibilities for users. However, using one incorrectly can cause several headaches. Not to mention the number of debts you will get. Thus, like everything in life, using a credit card has both positive and negative aspects. This is why we have made this list.

A credit card makes it possible for people to buy high-value products. And this is because, as we mentioned, people can purchase items paying for them in several installments. Installments are good because It is very difficult for users to save money and buy in cash.

That is the reason why credit cards were invented. Have you ever experienced needing a certain product as soon as possible and felt like saving money to buy it was very hard? Well, then you are not alone.

See below our list, containing the advantages and disadvantages of credit cards.

It can be quite complicated to walk on the street carrying cash in your wallet. After all, violence is everywhere. But with a credit card, this risk is pretty much smaller. Because if you happen to lose it or get robbed, you can call the credit card management company and ask for them to block it.

Whether you are an organized person or a disorganized person, unforeseen events can come up when you least expect them. However, when you know how to organize yourself, then working around your problems may be easier. Especially, if you have a credit card in your hands.

In other words, you will not get in a tight spot financially. Also, you will solve the issue without much stress, maybe with no stress at all. Obviously being financially prepared means saving in advance. But we all know the busy routines get the best of us,

So, if you do not have an emergency reserve at the moment, a credit card can come in handy.

Who doesn’t like one-click purchases? Whenever you go shopping, a credit card will definitely be the most agile and dynamic option you will have. With credit cards, purchases are made and approval processes are performed almost instantly.

Therefore, when used well, credit cards can give us more time to pay for our purchases. And this means that our purchasing power increases considerably.

In addition, if your card issuer offers you an interest-free installment plan, and if you are an organized person as well, you can invest your money and earn interest until said installment is due.

Fourthly, credit card companies may offer benefits such as bonuses for airline tickets, discounts, and points for products or services. As a matter of fact, there are even websites where you can sell your miles in case you will not use them.

For more, check our articles on the best travel rewards cards.

Bottom line, try to always set aside part of what you earn for any purchases will may need to make in the future. That is, in addition to your fixed expenses. This way, you will be able to organize yourself in a better way. So, the credit card will be at your disposal, but only to be used intelligently, or during emergencies.

But are there any disadvantages of having a credit card, as it is such an amazing tool? Well, sadly there are! Here it is three of them.

If you tend to not control yourself when it comes to consumer goods etc., then we advise you to be careful not to ruin your finances. In this case, it is best that you decline the idea of having a credit card. If you definitely need one, do not apply for more than one.

People who consume excessively will probably delay meeting the full payment’s due date. Which in turn will trigger the accumulation and charging of very high interest rates. So, it will be impossible to pay off debts.

The ways in which credit cards can be used can generate many concerns. As it is easy to access this tool, as well as people can easily ask for a larger credit limit, many people start using such a tool as if it were an “extra income”.

So, do not be confused: your credit limit and your salary are not the same. Actually, you should not have a credit limit that is larger than the amount you earn.

Do not be caught in the illusion that buying with a credit card makes money in your pockets. Otherwise, it is possible that you will see yourself in the middle of a bad credit debt cycle.

The third disadvantage we want to present to you is the possibility of fraud. Yes, having a credit card is safer than walking around carrying money. But, although we talked about safety as the first advantage of a credit card, well, people with bad intentions are as smart as the new technologies.

Although a credit card has certain security mechanisms, it can be cloned. Nowadays several hackers take advantage of purchases on unreliable sites or at ATMs to copy the data of your card. So, be careful.

As for online shopping, always check if the website has security certificates. In addition, always ask for advice from your bank account manager. S/he will know which safety habits you can adopt.

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