The credit card is an automatic advanced card, when you use it, you can get the products you bought without paying for them yet. Credit cards are a widely used source of convenient credit for restaurants, hotels, mail order, online shopping, gas stations, supermarkets, dental and medical care, church bazaars, as well as products advertised on the telephone and on television. There are many pros and cons to using credit cards, but the consequences of misuse can be drastic and painful.
Advantages
Credit cards eliminate the need to carry large sums of cash
If you’re out and about without cash, you can often receive a cash advance or have the option to purchase traveler’s checks with a credit card
Places that are suspicious of personal checks often accept credit cards.
Credit cards act like a short-term loan if you find something that’s a bargain and you don’t have the cash or checking account balance to pay for it.
If you move to a new place, credit cards give you purchasing power until you establish yourself as a good risk in a new community.
If you charge for an item or service that costs $50 or more in Colorado (or within 100 miles of your home) and then find that it doesn’t work or has other problems, you can withhold payment from the credit card company if you’ve tried resolve the issue with the merchant.
You often get the best exchange rates when traveling to foreign countries if you use your credit card for purchases and your ATM card for cash. Check with your card issuers about surcharges before you travel. An overload of two to three percent can eliminate this advantage.
Credit cards can help coordinate receipts for tax purposes.
Accounting is reduced to a monthly bill as opposed to checks.
Disadvantages
Some people have been scammed by giving their credit card numbers to dishonest telemarketers.
It becomes a loan when the loan comes due and you don’t pay it back.
Adding monthly interest charges means you pay more for goods and services.
Consumers often have more than one credit card and each one has a credit limit. When the credit limits of all the cards are added up, the total can be in the thousands of dollars. Consumers can get into the habit of using credit cards to expand their income.
Credit cards are easier to use than borrowing, even though a loan from a credit union, bank, or other financial institution may provide the funds at a lower interest rate.
