Advantages of Credit Cards
Credit cards are no doubt a real convenience and their advantages are numerous but as with everything in life, credit cards also have risks. Judging by the wide-spread use of credit cards, one might think that the risks are negligible but this is not exactly so. Or, if one considers the quite frequent reports of credit card frauds and debt, he or she might swear that credit cards are an evil. Well, the truth is somewhere in between and if you use your credit card wisely, chances are you will not get in trouble.
The convenience of having a credit card is an unbeatable advantage. When you have a credit card, you don't have to worry that you have no cash on you. You see a bargain price, put out your credit card and pay. Credit (and debit cards) are certainly a more convenient and more secure way of payment than carrying cash. In any case, both cash and credit cards can be stolen and although credit card frauds are possible, it is a little bit more difficult to pay with your stolen credit card than with your stolen cash.
Credit cards are also an easier way to get credit, in comparison to loans. With loans you have to go through a long approval procedure every time you need a new loan, while with credit cards you can get the amount you need, provided that it is below your limit. For small purchases and for short-term credit, credit cards are certainly a better option than the bureaucracy of loans.
Credit cards are especially good for emergency purchases, like visits to a hospital, or unplanned stay at a hotel, when you are far away from home. Even with careful planning, there are times when you desperately need something but pay day is far, so instead of asking friends and relatives for financial help, you can use your credit card instead - you pay now and in a couple of days or weeks, when you already have the money, you cover your credit card balance. However, if you don't distinguish between an emergency purchase and impulse shopping, you might soon see your debt on the rise.
Credit cards also offer bonuses for regular customers (for instance frequent flier points or discounts for loyal customers). You can get really good deals simply because of the fact that you have been a regular customer for some time and you have purchased goods and services that reach a particular amount. However, bonuses is an advantage that can quickly be turned into a major risk for getting in debt, if you are not careful. For instance, if you buy things that you don't need just because you will get a bonus or a discount for purchasing them, then you actually pay for your bonus and there is nothing to be happy about.
Another advantage of credit cards is that they help you build a good credit record or to restore your good credit history, when you have been a bad payer in the past. There are credit cards that are issued even to people with bad credit history, like prepaid and secured cards. This could be a life-belt to start clean, when you have bad credit and because of that you are not able to get a loan at all. However, it goes without saying that if you don't manage to pay off your credit card payments, you will get bad credit record, which will be an obstacle to getting any further credit, including credit card credit as well. It is a kind of a vicious circle and if you are not careful, you might pretty soon experience the bad sides of credit cards, like high interest rates, for example.
There are some other advantages of the different types of credit cards but they are dealt with in the articles about the particular types of credit cards because these advantages are not about credit cards in general but are more related to the particular type only. There are many varieties of credit cards and it is not possible to summarize their benefits. One of the places that you need to check about information regarding the advantages and disadvantages of the credit card of your choice is the Card Holder Agreement. Read this document carefully because it clearly states what you can and cannot do with your credit card.