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Paying with credit card—The Pros and Cons

Posted by on Dec 21, 2017

Paying with credit card—The Pros and Cons

The topic of credit cards have always caused a great deal of ambiguity in the world of financing. Accepting them can put you better off in terms of convenience of shopping, leisure discounts, hotels and other privileges. However, on the other side of the coin, it can also bring potential financial losses.

Having a credit card can act as a great tool in your wallets when in need. But, overusing them to make purchases can often take you down in debt. So, before you decide to use or accept a credit card to make your life convenient, consider the following pros and cons.

The benefits

If you are a business man, accepting credit cards can bring you immense benefits such as, sales! This is because most people prefer paying through credit cards and will find it convenient to shop around in your store if you accept card payments.

Likewise, if you are an individual looking to purchase something for a long time but lack finances, you can use your credit card to buy it now and pay later.

Additionally, most credit cards are accepted internationally. So it makes it easier to travel with a card, rather than looking for exchange houses to convert your home money. Therefore, you can make use of credit cards to ease travelling and receive amazing discounts/rewards and improve your credit score.

The downside

Many people are not aware of the fact that credit card providers cut a certain percentage of interchange fees when the card holder makes a payment using credit cards. This makes it very expensive for small business, usually eateries, salons, where interchange fees on such items can cause financial drawbacks.

Furthermore, credit cards are equipped with high level of interest and penalties if payments are not paid within or before the due date expires. This can cause individuals and businesses to go in debts and hence ruining credit score.

Today, it is easier for credit card frauds to occur rather than stealing cash. In the past few years many complaints have emerged regarding fraudsters stealing identity and using stolen credit cards. While, credit card fraudsters can easily be blocked from using a stolen plastic card—there is still possibility.

Things to consider

If credit cards are used moderately, they can be a blessing in disguise. But, if you get too excited with owning a credit card, you may find yourself in a pitfall of finances. Additionally, choosing to pay through credit cards or cash is ultimately your decision. Many people opt to use credit cards when they cannot afford to pay for things they desire, while this may bring immense happiness, it also causes great financial issues when one is not able to pay for it later too.

Therefore, be wise and opt for credit cards if you are financially stable enough to make timely payments. Make sure to read our aforementioned pros and cons before you opt to swipe off that plastic card!

 

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