Essay – Credit cards : A boon or a bane?

          Credit card is an Automatic advance card that we can use it anywhere to buy things without pay for it by cash. Usually, credit card is use by affordable people. Even we can buy things by paying with credit cards, we are actually owe the bank because we did not pay for it yet. Credit cards are convenience to use anywhere such as at the supermarket, shopping mall, restaurants and hotels. There are several advantages and disadvantages of using credit cards. The advantages include ease of purchase, can use for emergencies and protection of losing or stolen. In contrast, the disadvantages include high interest rate and increase debt, lost control of money spending and credit limit exceeded.

            One of the advantages of using credit cards is ease of purchase. It is because credit cards are easy to bring anywhere and we do not have to carry huge amount of cash around if we go shopping or somewhere else.  For example, there are some companies does not accept cash purchases such as most airlines, hotels and car rental agencies. So, people can make easy payment using credit cards. They also can make online shopping and pay for the product through online with their credit cards. But one of the disadvantages of using credit cards is lost control of money spending. It encourages people to spend more money that they do not have. Most credit cards do not require you to pay off your balance in certain time. For instance, even we only have a few balance in your account, we can still use it to buy goods or services. This shows that the more we spend the money by using credit cards, the more amount of money we will owe the credit card companies and also have to pay for the interest charge for the money we used.

            Furthermore, credit cards also can be useful in emergencies time. Sometimes emergencies such as car breaking down, accident or fire require us to spend large amount of money such as the hospital bills or the need of rental car. For examples, when we go buy the groceries at the supermarket, we did not realize that our money is not enough to pay for the things we bought, so at that time we can use the credit cards in emergency.  Although the credit cards are useful in time of emergencies, it also lead to high interest rate and can increase debt. Credit cards companies will charge us high amount of interest for each balance if we did not pay it on time. For instance, if we did not pay off the balance in one month, they will charge us the interest almost 10 times more than the amount of balance we owe and bring to next month until our debt is increased and we will even face bankruptcy. Therefore, credit cards can make life easier but if we are not used wisely it can become a huge financial burden.

           

            Besides that, the advantage of using credit cards is the protection of losing or stolen. It is more safety to buy things using credit cards because we do not have to withdraw large amount of cash that lead to lost risking.  For example, if our credit cards had been stolen or losing, we can call our service provider to stop the uses of it and we can issue a new card. Moreover, the credit card agencies also provide fraud protection to its customer.If we are a victim of fraud we will not have to pay if a fraudster uses our card. Many credit cards also offer some type of insurance if your purchase is stolen. However, back to the disadvantages of credit cards is all credit cards have a credit limit, which may be less than we expected or hoped for. If we have poor credit rating or getting the credit card for the first time our credit limit may be available at certain amount only. So we cannot buy things in large amount using credit cards because of the credit limit.

            In conclusion, while there are a few disadvantages to credit cards, there are also several advantages to a credit card. The most important is when we applying for the credit cards, we have to be careful in using it so it can eliminate all the disadvantages and manage our credit card well to obtain their advantages. The ease of purchase, can use for emergencies and protection of losing or stolen are the advantages of using credit cards. In contrast, the high interest rate and increase debt, lost control of money spending and credit limit exceeded are the disadvantages of it. Last but not least, think carefully before applying for a credit card.