Credit Card Calculator Advantages And Disadvantages Of Owning A Credit Card
Pros for the Credit Card Owner
Some of them are listed below.
- It can be used as a loan. The money is borrowed from the bank if one uses a credit card. So if something is expensive, a cardholder must have that required amount. One can make use of the card.
- It's safe to carry a credit card instead of lots of cash. It is also better to involve cards in huge transactions instead of cash.
- Discount and Protection on various purchases. Credit card companies offer Protection on specific transactions. Also, credit cards carry a discount of 1-3% in the form of cashback.
- Using a credit card responsibly improves the credit score. It ultimately results in a good loan amount when a person plans to buy a car or home.
Cons for the Credit Card owner?
If someone needs to improve with financial decisions, owning a credit card can attract more financial troubles.
People can be impulsive and make extreme transactions that can't be met monthly. It is in favor of the issuer of credit cards because they get to charge a penalty fee apart from the interest.
So for these people, the credit score also takes a downside. They don't get financial help from other banking sectors because of their poor credit score. It is affected because of the missing payments on the Credit Card.
However, if any owner finds himself in deep debt, there is a process in which all sides of debt are combined under one. It is a new line of credit and can give temporary relief.
What perks do credit cards offer?
Credit Card Companies offer various perks along with credit cards. Some may offer you simple offers like discounts or cashback. Credit Cards with annual fees may offer benefits like tire replacement, towing, fuel, and more perks are mentioned below.
- Some credit cards offer rental insurance. The full cost of the rental card may be charged through that specific credit card.
- Some credit cards offer tickets to concerts and movies before it is out for the whole audience. It's a first service exclusively for their members.
- Insurance on Travel- People often must cancel a flight for sickness or other reasons. It is a huge loss. However, canceling flights is covered under the credit card perks.
- It also improves the Credit Card Score. Hence it indicates a person's good relationship with the bank, and the person gets offered several loans. It is useful if one tends to buy a car or house.