Credit card - Advantages and Disadvantages

Credit card - Advantages and Disadvantages

A credit card is not the same as a debit card. Under credit card, every time you purchase or transfer the balance from other card, you are actually borrowing the money.

Credit cards are creating huge issues in the lives of most of the people. But, at the same time, it is also proving beneficial for many.

A proper usage of the credit card can generate a lot of advantages for the customers. But, using a credit card unwisely can end you up in between a lot of troubles.

Let's take a look at the advantages and disadvantages of credit cards.


1. Convenient – Credit cards can save your time as you do not have to go in search of an ATM. You can travel safely as you do not have to worry about keeping the cash in hand. Credit cards are useful in case of an emergency when you lack ready cash.

2. Building positive credit – Disciplined use of credit cards can help you to establish credit for the first time or help you to rebuild the credit if you have had problems in the past.

3. Achieving rewards – Depending on the credit card you have, you can earn a variety of rewards including cash back on everyday purchase, including gas and groceries etc. Many credit card companies offer incentive programs based on the amount of purchases that a customer makes.

4. Save money – When a customer consistently pays his bill on time, it helps to improve their credit score. With a higher credit score, one may qualify for low interest rates on mortgages, cars etc, which helps the customer save his/her money.


1. Blowing off the budget – The main disadvantage of a credit card is that they encourage people to spend more than what they have. Most of the credit cards do not require you to pay off the balance each month. The longer you wait, the more money you have to pay.

2. Credit card fraud – Like cash, credit cards are also stolen at times. They may be physically stolen and people can use them to clean up their own debts. Online frauds caused by hijacking the credit card details are not new anymore.

3. Hidden costs – The interest rate is the not the only cost of your credit card. A heavy financial charge is levied if the customer does not pay the monthly bill on time. The customer also has to pay a penalty if they exceed the time limit.


Credit cards may be a great tool and can make life easier, but if it is not used wisely, they can turn out to be a huge financial problem.

Use credit cards but remember to keep a track of all your purchases and try not to spend outside your budget.
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  • RE: Credit card - Advantages and Disadvantages -Sibram Pradhan (06/26/15)
  • Dear deepa i love ur view abt credit card. Cell phone number 09692116040
  • RE: Credit card - Advantages and Disadvantages -Soumya Ranjan Pathy (06/21/15)
  • The idea of introducing credit cards was a revolution in itself. Credit system runs back to thousand of years. But i think the system of credit cards is on its way out. Mostly because its disadvantages has shadowed over its advantages. No doubt that it can help a lot during the time of emergencies but people have started to see through its cons. Banks introduced this system on the ideas that people don't have to run ATM. But now a days anyone who has balance in his account prefers swiping his debit card instead of borrowing money. Its logic. Few years ago when a lot of people in rural areas got in trouble due to unknowingly usage of credit cards over the limit, Govt. of India took major steps. Nation wide awareness about these systems and interest rates has helped a lot. People now prefer loans at govt. subsidized interest rates. They keep balance in their accounts which is subjected to interest and thus they get value for that money and can also access that money through debit cards. International debit cards are also available for people to use in foreign nations. There are several types of debit cards depending upon the maximum limit of money one expects to spend at one time.
    Thus, with more and more awareness people are preferring debit cards over credit cards. No doubt that if we use credit card wisely it can prove to be a bless, but why take a risk if we have solution right before us.
  • RE: Credit card - Advantages and Disadvantages -AMAN SARSWAT (06/21/15)
  • hello everyone :)
    Credit card has a different type of advantages and disadvantages also but using it in proper manner it can be a great tool for our busy life. we don't have so much time to go to the atm for withdrawing money so if we have credit card it saves our time .
    Now a days there different types of schemes are also associated if we pay through our credit card like cash back and a little bit discount also so w can say that it saves our money also.
    Now if we see cons of credit card it also have like if we forgot to pay our cc bill then the due amount is charged with approx 32-34 % interest rate. there are different types of cons are also like credit cars fraud, credit card hijack these are also problems

    so we can say that credit card can be used more fairly who have well maintained finance
    if we use it properly it can be very helpful.
  • RE: Credit card - Advantages and Disadvantages -Deepa Kaushik (06/19/15)
  • Every aid has its own advantages and disadvantages. It depends on our sensible use that makes the aid a boon or curse for us. Credit card also has its own set of pros and cons. People often forget to understand the importance and seriousness behind the usage of credit cards.

    our country doesn't give much weightage o the credit score of the individuals. The biggest disadvantage with the misuse of the credit cards is the hit to the credit score. Those countries which give importance to credit score gives a big blow to those who dip down ontheir credit score. this makes the individual remain careful with every penny they spend.

    Credit card, unlike the debit cards provide people with everything they need without actual cash into their account. This is very much similar to borrowing money with heavy interest rates as penalty if the bill is not paid in time. If the individual making use of the credit card fail to keep a trackof the transanctions and available finances, they end up in heavy debts. the increase in debts of the citizens of the country indirectly hit the economy of the nation as well.

    Those who have well-maintained finances can use the credit card fairly. It is highly advantageous over carrying cash into the pocket. We can spend a small amount over our pocket, if required while outside. However, such a practise if repeated often leads to over-spending the laid-on budget for the month. Credit card proves to be highly advantageous at times of emergency, when we need to make the payment before having the finances into the particular account. Handling the emergency crisis is far more easy with the credit card handy into the pockets.

    Precisely, the way of usage makes the credit card advantageous or disadvantageous. A wise usage of the credit card is always beneficial for the healthy economy.