Many are faced with the choice of whether to use a credit card or not. On the one hand, this is a fairly convenient and quick way to pay for a purchase if there is no required amount at the moment. On the other hand, this is money borrowed from the bank, which will need to be returned with interest. Before making a final decision, it is worth evaluating all the advantages and disadvantages of this banking service.
pros
Grace period
Unlike other types of loans, the user of a credit card can return the borrowed amount within a certain period of time without paying interest. Each bank sets its own term. Interest begins to accrue only after this period, if the loan has not been repaid.
The credit line is revolving and can be used more than once
When repaying a regular loan, the client can no longer use these funds, then the credit card provides such an opportunity. When all debts are paid, the previous amount is restored and you can use it again, if necessary. Also, the credit limit can be used in parts.
The client can spend money at his own discretion
Sometimes banks impose restrictions on certain transactions. But, in fact, you can pay for any purchases, services.
Receive bonuses and cashback for purchases
Today, banks are actively expanding the offer to return part of the interest to the account after payment by card for goods and services in stores or companies that are their partners. This allows for significant savings.
You can design several cards and use them for different purposes
Of course, the disadvantages cannot be ignored, since they can become the causes of problems.
The interest rate is much higher than with a regular loan
Credit card interest can be 2-3 times higher.
Banks sometimes impose severe restrictions on certain transactions
As a result, credit card payments may not work in some stores or companies. Also, many banking institutions impose a ban on withdrawing cash from an account, or on transferring to another bank. Or, when carrying out these operations, you will have to pay a substantial commission.
Care must be taken not to fall for the tricks of scammers
If criminals become aware of important personal data, then the client runs the risk of being left not only without money, but also receiving a large debt to the bank.
Psychological addiction
Unfortunately, people lose their guard and start spending more money than they can return. This turns into a vicious circle when clients take out a new loan or spend all the money they earn to pay off debt.
Therefore, before applying for a credit card, it is worthwhile to think again whether it is worth using this offer. Is there enough funds to pay off the debt, will this decision lead to a deterioration in the financial condition.