The Pros and Cons of Credit Cards

Have you ever been in a situation where you needed a make a big purchase and you had no cash to offer? This is the most common scenario where having a credit card in your wallet is beneficial.

It can bail you out of tough financial situations. Plus, you also get to build your credit which will, in turn, allow you to get approved for more credit at a low-interest rate.

credit benefit

The purpose of this post is to share some of the pros and cons of using a credit card. We all know there are many positives of having a credit card in your wallet, but there are some negatives too which you need to aware of.

Pros of Credit Cards

1. Credit building

Good credit allows you to get approved to a low-interest loan, house mortgage, or get an unsecured credit card with lots of rewards. In some cases, you also get first preference when it comes to renting an apartment. Landlords seek people with good credit history. To start building credit today, apply for a secured credit card or a credit-builder loan.

2. Reward points, cash back, and miles

Another benefit of using a credit card is the amazing rewards that you get. Some credit card companies offer bonus reward points on the purchase of the card. You are required to spend a certain amount within the first three months of the purchase. This feature is mainly included in travel-friendly and shopping-friendly credit cards. Cashback and airline miles are also a form of rewards that make using a credit card a pleasure.

3. Grace period

Getting a grace period of 21 days is another pro of using a credit card. You can pay your credit card bills(interest-free) anytime within 21 days of making a purchase. Exceding the date is not a great idea as you will also have to pay the interest in your purchases. Basically, the grace period allows you to borrow money for free.

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Cons of Credit Cards

1. It can be unsafe

You might have heard of cases like identity theft or credit card fraud in the news. The cases of unlawful usage of credit cards are on a rise since the last couple of years. People are getting more comfortable using eCommerce sites like Amazon and Etsy to do their online shopping. And hackers are well aware of loopholes in the system. Credit card thieves can steal your identity, sell your personal information and in some cases also shop with your stolen credit card number.

2. Missing a payment can turn into a nightmare

Missing a payment will get you in all sorts of trouble. First of all, your credit score takes a hit and, next, you have to pay late fees along with the interest on your outstanding amount. This interest is compounding, so in your next billing cycle, you will have to interest on your outstanding payment for that month plus the previous month’s interest.

3. Overspending

Overspending is another con of using an unsecured credit card. It is very common for people to overspend when they are feeling low in life. In fact, there is a term for this called “Emotional Spending“. Being emotionally unsatisfied is the number one reason people overspend.


These are the pros and cons of using a credit card. However, it is possible to avoid the cons and only reap the benefits by using it smartly. You don’t need to be a personal finance expert to use it smartly. Just pay your bills on time, don’t overspend, check your credit report regularly and do not share your credit card credentials with anyone.

About the author

Mark Holland

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