Are Credit Cards Good or Bad?

Credit cards are becoming an increasingly popular form of payment. But is a credit card right for you? Before signing up for one, consider the many pros and cons:

Pros

Credit cards allow users much more flexibility and freedom to make purchases online, over the phone, and abroad. They will also help protect against theft and billing errors, when caught. A credit card can also help to track your finances, as you will receive monthly bills that detail what purchases were made. This will let you see where you are using the most money, so that you can be more conscious in your spending. Some credit cards have rewards programs and offer cashback as an incentive for using your card. Credit cards are also an effective way of building your credit score, given that you make payments on time and use your card responsibly.

Cons

Just as credit cards can improve your credit score, they can also ruin it. Making bill payments late will accrue high fees and interest, which you will need to pay off as soon as possible. Continuing to make late payments will then hurt your credit score. Because credit cards are as easy to use as simply swiping or typing in a number, it is sometimes easier for people to overspend using a credit card than with physical money or a debit card. Credit cards are also vulnerable to fraud or overcharging, and it is up to you to check your monthly bill to ensure that you were not overcharged. It is also important to research interest rates on credit cards, as some companies may offer low starting rates that go up months later.

Ultimately, you are the only one who can determine if a credit card is right for you. If you are confident that you can make monthly payments on time, then a credit card is a convenient payment choice and a great method for improving your overall credit. But be aware of the risks should you be unable to make payments or closely track your monthly bill.