Credit Card is an Automatic advanced card, when you used it, you can get the goods you bought without paying for it yet. Credit cards are a widely used source of convenient credit for restaurants, hotels, mail order, on-line shopping, gasoline stations, grocery stores, dental and medical care, church bazaars, as well as telephone and television advertised products. There are many advantages and disadvantages of 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 are away from home without cash, you often can receive a cash advance or have the option of buying traveler’s checks with a credit card
Places that are suspicious of personal checks often take credit cards.
Credit cards act as a short-term loan if you find something that is a bargain and haven’t the cash or balance in your checking account 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 an item or service that costs $50 or more in Colorado (or within 100 miles of your home) and later discover it doesn’t work or has other problems, you can withhold payment from the credit card company if you have attempted to resolve the problem with the merchant.
You often get the best rates of exchange when traveling in foreign countries if you use your credit card for purchases and your ATM card to get cash. Check with your card issuers about surcharges before you leave on your trip. A two to three percent surcharge may eliminate this advantage.
Credit cards can help coordinate receipts for tax purposes.
Bookkeeping is reduced to one monthly bill as opposed to checks.
Disadvantages
Some people have been swindled by giving their credit card numbers to dishonest salespeople over the phone.
It becomes a loan when the credit becomes due and you do not pay for it.
Adding monthly interest charges means you pay more for the goods and services.
Consumers often have more than one credit card and each one has a credit limit. When the credit limits for all cards are added up, the total can be in the thousands of dollars. Consumers can fall into the habit of using credit cards to extend their income.
Credit cards are easier to use than applying for loans even when a loan from a credit union, bank or other financial institution may provide the funds at a lower interest rate.
