The money lender offers a variety of options for borrowing money. cash loan, credit card loans, etc. In an emergency, it is best to have money on hand. Credit cards are now a part of everyday life for many people.

Possessing credit cards has both advantages and disadvantages. You may meet a person that manages credit card payments well, or you may meet someone who has a mountain of credit card debt.

To build a high credit score, you should use your credit cards wisely. Payment of credit cards on time can increase your score and help you get higher credit limits. Read on to know some of the pros & cons of owning a credit card.

PROS OF OWNING A CREDIT CARD

CREDIT ACCESS

Credit cards give their users easy access to credit. Credit cards have a credit limit, which is communicated to the cardholder in advance. Credit cards allow you to access your money whenever you like. By owning a card, you don’t need to wait in long lines to submit your loan request.

BUILDING A CREDIT LINE 

Credit cards allow you to establish a positive credit history. Your credit score will increase if you have a good credit history and pay your loans on time. In India, a credit score of 700 or more can be considered high.

To determine creditworthiness, banks and other institutions look at credit scores and credit histories. Good credit history can help you get future bank loans.

It’s not difficult to get a credit card, but it isn’t easy to use one wisely. A good credit score and history can be built by making on-time payments, and using credit wisely.

INSTALMENTS 

If you’re looking to invest a large amount of cash in something, but you don’t want your savings to be drained, you may want to consider a credit-card loan that is paid in EMIs. The amount can be paid in monthly instalments, which will reduce the financial strain.

You must pay the interest included in your EMIs monthly. It is important to research all the credit cards available and choose one with lower interest rates. Paying the amount in EMIs is more convenient than taking out a personal loan.

Stashfin Credit Card Lines are simpler than traditional credit cards. This card will allow you to pay only interest on funds that are accessed, which increases transparency. Stashfin’s Credit Line Card requires less documentation and application.

Offers 

Credit cards can offer cashbacks, reward points or both. Lending firms offer reward points that can be redeemed to get various benefits, such as paying bills, travelling, shopping etc.

If you use your credit card to pay for goods and services, you can get discounts. Earning rewards and incentives can help ease financial pressures, while also making you a valued customer.

The period of interest-free borrowing is a maximum of 12 months. 

You will not be charged interest during the interest-free period. You will only be charged interest on the borrowed amount if you pay your credit card during the interest-free phase.

Only a few credit card companies provide interest-free terms, which are typically shorter. Credit cards allow you to benefit from flexible payment plans.

Record of Transactions 

Users of credit cards receive a detailed statement every month detailing all payments made with their card. It is not only useful for easy reconciliation, but also to analyse your expenditures or budget.

You can also file a complaint for any unauthorised charges that are listed on your monthly statements. Your money is also protected by the strong security measures of credit cards. Some credit cards provide insurance coverage for purchases made with the card in case it is lost or stolen.

The cons of owning a credit card 

HIDDEN FEES

Most people tend to only pay the minimum amount shown on their credit card. You will end up paying higher interest if you fall into this trap. The minimum payment is required to continue receiving credit card service.

Paying the minimum amount due may seem simple, but over time it will add up. Credit cards have many hidden charges, besides the minimum payment trap. Credit card charges include late payment fees and processing fees. They also include joining fees, renewals fees, and other fees.

FRAUD 

Fraudulent use of credit cards is one the most dangerous threats to which a person is exposed. New ways to steal money are introduced with the advancement of technology. You should not make suspicious/unauthorised purchases by your credit card to avoid becoming a credit card fraud victim.

RATE OF INTEREST GOES UP 

If you fail to pay on time you may be charged late fees. The due amount will be carried forward, and interest will be applied again. The interest rate can be huge, making the owner of the credit card miserable.

Credit card ownership comes with certain basic responsibilities. To avoid interest rates, you must pay your bills on time.

Overusing a Credit Card 

Your bank balance will not be affected by paying for your necessities with a credit cards. You may think it’s extravagant at first, but you will end up paying for it. Credit cards are often used by people to make larger purchases than their budget allows.

To avoid financial trouble, it is important to be aware of your spending and adopt good financial habits. Credit cards should only be used in emergencies.

The Nutshell

How a card is used depends on its user. Credit card misuse can affect your credit rating and creditworthiness. You should opt for cash loans if you don’t need a credit card to cover your daily expenses. Stashfin also offers a simple credit card with many benefits. Use a Stashfin Credit Line Card today!