Credit cards offer convenience, help build credit, and come with frivolous rewards.
But, just like a two-sided card, there's another aspect to consider.
Credit cards can be a powerful financial tool. They are the perfect financial sidekick that’s always there for you when reality goes a little too hard on you.
But credit cards also have its disadvantages. It’s like the saying: you can never have too much of a good thing. Sa Tagalog, hindi mabuting maghangad nang sobra-sobra kasi hindi ka na makukunteto sa anong meron ka. Kaya moderation is key!
Today, we dive into the cool and not-so-cool sides of credit cards to help you make better buying decisions before swiping them:
The Pros
Credit cards are incredibly convenient You can use them for almost any type of purchase! Whether you’re shopping online or having a fancy dinner out, a credit card’s got your back. No need to carry around cash or worry about checks.
Endless rewards and perks
Think travel miles, discounts, cash back, No Annual Fee for Life, and more. Credit card rewards can often feel like getting free treasure just for spending on regular stuff.
You can build an epic credit history
Yes, banks can actually help you! Get in touch with them to see if they’re willing to lower or waive your interest fees. In that way, you only have to pay the total principal amount in small batches. This can make your payments more manageable, allowing you to pay down debt faster.
Credit cards are safer to use than debit ones
Lost it or had it swiped without you knowing? No worries! You can report it, say it got stolen, and your card company will cover any unauthorized charges.
Unlike debit cards, credit cards offer extra layers of protection, keeping your hard-earned savings out of harm’s way.
The Cons
The temptation
Having a credit card in your wallet can be an invitation to overspend. You always think you can pay it off later, only to find yourself in a tricky financial situation.
Sneaky interests and fees
Some credit cards come with hidden annual fees and high-interest rates. So it’s best to keep a watchful eye on your balance ‘cause these costs pile up fast if you’re not paying attention.
The possibility of hurting your credit score
Mishandling a credit card can lead to a bruised credit score. When you hit a slippery slope, like a couple of late payments or worse, maxing out your card, you’re gonna lose your creditworthiness faster than you think.
You might lie on your debt bed with no escape in sight
The ultimate drawback of misusing your credit card? The potential to accumulate debt. It’s easy to underestimate your spending but high interest rates can turn it into a financial tragedy.
The final word
Some credit cards come with hidden annual fees and high-interest rates. So it’s best to keep a watchful eye on your balance ‘cause these costs pile up fast if you’re not paying attention.