Some like credit cards, but many others treat them with suspicion. There are many people who like them but do not comprehend how they work and go into debt, while those who treat them with doubt in this regard, again do not comprehend how they work.
It is true about the fact that there are handicaps that happen to a person who has a credit card. Nevertheless, there are many more advantages to having one. Have a look at some of the advantages and handicaps of having a credit card.
Advantages:
1. Free credit. The main reason about credit cards is their popularity. They give you a credit, so you can buy something and not have to pay for it at a later date. If you pay the full amount in this case the credit is free.
2. Credit cards provide a simple and secure way to pay for things in the UK and abroad, especially when you buy things by telephone, mail or the Internet.
3. Deception protection. If you are a victim of deception you will not have to pay if a crook uses your card.
4. Global approval. Credit cards are approved in almost every country in the world. You can use them not worrying about the exchange of different currencies.
5. Many cards suggest motives such as loyalty points, charitable payments or cash back for using your card.
Handicaps:
1. The biggest handicap of using credit cards is that your interest will be charged if you fail to repay the balance in full each month. The interest values vary among different card providers, but may be as high as around 20%.
2. Every credit card has a credit limitation, which may be less than you expect or hope. If you have a poor credit rating or get a card for the first time the credit limit may be confined to around 500 pounds. Those who have a good credit rating or have been using a card for a number of years can have a credit limit in the region of 4,000 pounds.
3. One more advantage is that having and using credit card teaches a person to manage his/her finances in a disciplined manner, otherwise if not to accumulate rapidly a large debt.
4. The fees are a handicap because they are some of the highest on the market. Prices include cash advances, late paying as interest rates. Inability to properly handle your card will be a subject to these charges, which can quickly make your balance considerably higher.
While there are some handicaps to credit cards, there are innumerable advantages. Careful and disciplined management can eliminate all the handicaps and leave you with only the main advantage of having a card.
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