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Advantages and Disadvantages of Credit Cards
Advantages and Disadvantages of Credit Cards
Advantages and Disadvantages of Credit Cards
Protection of Purchases
Credit cards may also offer you additional protection if something you have bought is lost,
damaged, or stolen. Both your credit card statement (and the credit card company) can vouch
for the fact that you have made a purchase if the original receipt is lost or stolen. In addition,
some credit card companies offer insurance on large purchases.
Building a Credit Line
Having a good credit history is often important, not only when applying for credit cards, but
also when applying for things such as loans, rental applications, or even some jobs. Having a
credit card and using it wisely (making payments on time and in full each month) will help
you build a good credit history.
Emergencies
Credit cards can also be useful in times of emergency. While you should avoid spending
outside your budget (or money you don't have!), sometimes emergencies (such as your car
breaking down or flood or fire) may lead to a large purchase (like the need for a rental car or
a motel room for several nights.)
Credit Card Benefits
In addition to the benefits listed above, some credit cards offer additional benefits, such as
discounts from particular stores or companies, bonuses such as free airline miles or travel
discounts, and special insurances (like travel or life insurance.) While most of these benefits
are meant to encourage you to charge more money on your credit card (remember, credit card
companies start making their money when you can't afford to pay off your charges!) the
benefits are real and can be helpful as long as you remember your spending limits.