Advantages and disadvantages of credit cards

The use of the credit card has been extended to the point where we practically made all our payments with the so-called "plastic money". Financiers and banks have facilitated access to credit through their cards and we all find it more convenient to use them rather than carry money in your pocket. However we have to know the advantages and disadvantages of credit cards and in .com we tell you what they are.

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The first thing we have to understand is that a credit card is not the same as a debit card. The second charges instantly from the money you have deposited in your checking account, while the first one offers you a loan to be able to operate. For many it is useful to see the credit card as "fictitious money" that you do not have and have to return within a certain period.

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Although it can give us more than one headache, the truth is that the credit card carries a number of advantages, especially in an increasingly telematic world:

• Avoid having to carry cash.

• It allows you to have an extra amount of money .

• It is the most used payment method for electronic purchases .

• Most of them usually have a loyalty plan with redeemable points, discounts, reimbursement of a percentage of purchases ...

• If we are good payers it allows us to consolidate our credit profile, which will suit us when applying for loans and mortgages.

• You can defer payments or split them.

• You can have cash in a moment of urgency, making a transfer to your own account or withdrawing it through the ATM.

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It is clear that there are certain rather tempting advantages when it comes to having your own credit card, regardless of the fact that some firms only accept this method of payment. Now, a responsible use and knowing all that entails will be what allows us to make a good choice and not end an important hole in the family economy.

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These are some of the main disadvantages that can affect us if we access a credit card:

• The use of the credit card usually involves the payment of a series of costs of issuance, maintenance, renewal, extraction through ATM ... Look carefully at what commissions the card carries and make comparisons with other entities, some presume 0 % commission

• Deferred or fractioned payment means the return of money arranged with an interest rate, which in the end ends up making the purchase more expensive, sometimes alarmingly.

• There is a risk that your card will be physically stolen or that your data will be stolen over the internet, which could result in fraudulent operations with your credit card. Some companies offer card insurance that exempts you from liability and reimburses you for the money that can be stolen.

• It favors compulsive and unreflective shopping . It is very important to plan very well the use of the credit card to avoid excessive and unnecessary expenses.

• The non - payment of installments or terms of use of your card contributes to damaging your credit history, with which you would be closing the doors to the granting of more important and necessary loans.