Monday, April 25, 2016

The Two Sides Of Credit Card Usage

When you reap the benefits, it is your best friend. But once it shows its downside, it becomes your worst enemy. If you want you and your credit card to remain friends, know how to use it responsibly.

The credit card has benefits that most of us enjoy. First off, it is convenient. You do not have to bring a bulky wallet when you shop because this thin plastic card can do it for you. You can use it when you dine, purchase things, or avail of services. It is a great cash substitute, because other than standing in for cash, it provides you with more purchasing power than actual money. When you want to buy something you want but your savings are not yet enough to purchase it or your paycheck is not due until next week, the credit card would gladly grant your simple wish. The use of credit cards gets you a free expenses tracker as your purchases are recorded in the receipts and the monthly bill, and you do not have to list down your purchases one at a time. All these benefits and ease from a thin plastic card. No wonder people find one card insufficient.

Credit Card Usage

Of course, we know that if credit card usage is this easy and beneficial, it cannot be real. It is too good to be true if the use of credit cards is this good and stress-free. There are always two sides to every situation. That means if there are advantages, there are disadvantages. For one, the purchases that the credit card allows you are not for free. If that is the case, there would be no more existing businesses and the economy is dead. Every single item you buy with the card is to be paid when your monthly bill arrives. If you pay on time, good. It would seem like you used the credit card service for free, with a bonus of improved credit score. If not, interest and penalty fees would be added to the principal amount and you end up paying more than what you actually purchased. It could be worse, especially when you bought something that you know your paycheck cannot afford. And since you have more than one card, this situation can happen to all your credit lines, and you are left with multiple credit card debt to settle. There begins the life of financial stress and difficulty that your once best friend has brought you.

That is why it is good to think before you act. When you get a credit card, you should know how it works, how the credit system operates, the good and the bad that goes along with the card. Then you can assess whether the benefits weigh more than the drawbacks or the negative overpowers the positive. This gives you an informed choice and makes you an informed consumer. You also get to avoid acquiring overwhelming credit card debt that denies you of a peaceful and financially stable life.


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