Credit Card Benefits and Drawbacks
Credit cards have both benefits and drawbacks. It is wise to consider both before applying for a credit card. While they can be very useful, credit cards can also be risky. Even people who are usually good with their money get into trouble with credit cards. A credit card can be useful, but may also end up putting you in a difficult financial situation if misused.
Here are some of the benefits of credit cards:
Withdraw cash 24 hours a day, anywhere in the world.
Buy online. It is the quickest and easiest way, and you are protected against credit card fraud.
Repay in regular instalments. Typically, these incur interest.
Usually, there is an interest-free repayment period, which you can use to repay your debt in full, interest-free.
One of the main benefits of using a credit card rather than a debit card is the protection provided by the Consumer Credit Act. This says that if you have problems with goods or services you can get your money back from the card issuer if you can't get it back from the supplier.
Some cards provide purchase protection insurance, which pays out if something you have bought with the card is lost, damaged, or stolen within ninety days of the date of purchase.
A credit card can cost nothing - if you pick a card that doesn't charge an annual fee and you always pay the bill in full every month.
A credit card can save you money if you choose one that earns you cash every time you buy something. How much cash you get back is calculated as a small percentage of the amount you have spent on the card. Some cards offer incentives other than cash - Air Miles or shopping vouchers, for instance.
Even if you do not pay your monthly bill in full, a credit card can be cheaper than running an overdraft on your current account, especially if your bank charges a monthly fee as well as interest when you overdraw.
Using a credit card can work out cheaper than using traveller's cheques or foreign currency to pay for things abroad. This is because the exchange rate used by card companies to convert foreign spending into sterling is better than normal tourist rates. However, because of credit card charges for cash withdrawals, a debit card is better if you want to use plastic to buy currency, whether over the counter or from a foreign cash-machine.
You can give to charity for free if you sign up for a charity credit card.
Credit cards are often cheaper than loans for short-term borrowing. You pay interest on the remaining debt, not the full amount - and there are no early redemption penalties.
Credit cards offer flexibility to match uneven income and expenditure patterns: you choose what to pay off each month, between the minimum and the total outstanding.
Their consolidated accounting enables one cheque to settle multiple transactions ? while all appear neatly on one pre-prepared statement each month.
There is an automatic 'interest free' period per statement period.
Credit cards enable remote purchasing via the internet, by telephone or mail order.
Credit cards can include additional benefits like insurance cover on purchases, cash-back, AirMiles, Nectar or Reward points, and holiday discounts.
Here are some of the drawbacks of using a credit card:
Credit cards can be unnecessarily costly.
Credit cards may be expensive for cash withdrawals
Credit cards may be expensive for foreign currency purchases.
Their credit limits can be insufficient for your requirements.
They encourage a 'pay now, worry later' mentality and make it too easy to get into debt.
Credit cards are very open to fraudulent use.
You may freely reprint this article provided the author's biography remains intact:
About The Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.
 Google News Updated : Sun, 07 Sep 2008 02:07:34 GMT Tough Game Expected, but Penn State Makes It a Rout - New York Times
New York Times - By AP Evan Royster rushed for 141 yards and 3 touchdowns, Daryll Clark threw two scoring passes and the defense for 19th-ranked Penn State did not miss a beat without two suspended starters Saturday in a 45-14 victory over visiting Oregon State. Clark, Royster lead Nittany Lions to romp over Oregon State Big Ten early notes: Penn State makes a statement Publ.Date : Sun, 07 Sep 2008 01:17:05 GMT Google Chrome Reflects A Desktop In Decline - InformationWeek
InformationWeek - After 10 years as a company, Google is making the Chrome browser key to the coming of age of cloud computing, or software as a service. Mozilla updates Firefox 3.1 with Alpha 2 build Mozilla releases second Firefox 3.1 alpha Publ.Date : Sat, 06 Sep 2008 21:46:03 GMT 'Wrestler' takes top honors at Venice - Variety Variety - By JEFF SNEIDER Darren Aronofsky's "The Wrestler" has won the Venice Film Festival's Golden Lion. Pic stars Mickey Rourke as a past-his-prime wrestler on the comeback trail. 'Wrestler' wins Golden Lion "The Wrestler" wins Venice Golden Lion Publ.Date : Sat, 06 Sep 2008 20:11:44 GMT 'Bangkok Dangerous' - Los Angeles Times
Los Angeles Times - The Pang brothers remake their audacious 1999 film, but without the gritty, seamy feel of the original, it seems like just another bullet ballet out of a Steve Wynn dream. 'Dangerous' prosperous at box office An Assassin Arrives to Turn Off the Lights Publ.Date : Sat, 06 Sep 2008 22:52:03 GMT Hot Docs: Defending Georgia, Girls Married by 15, the Chemical BPA ... - U.S. News & World Report
U.S. News & World Report - A Resolute Strategy on Georgia: One day after Secretary of State Condoleezza Rice announced "at least $1 billion" in aid to Georgia, a Center for Strategic and International Studies report looks at increasing criticisms of such programs. Bisphenol A may harm fetuses, infants and children That Plastic Baby Bottle Publ.Date : Fri, 05 Sep 2008 14:01:40 GMT FDA to List Drugs Being Investigated - Washington Post
Washington Post - By David Brown The Food and Drug Administration will begin posting every three months a list of drugs whose safety is under investigation because of complaints brought to the agency's attention by drug companies, physicians and patients. The Basics on the Foodfight Over Irradiation 20 Drugs FDA Is Watching Publ.Date : Sat, 06 Sep 2008 04:19:40 GMT Rival Tickets Are Redrawing Battlegrounds - New York Times
New York Times - Senator John McCain and Gov. Sarah Palin held a rally on Saturday at an airplane hanger in Colorado Springs, Colo. By PATRICK HEALY and MICHAEL COOPER Fresh from the Republican convention, Senator John McCain’s campaign sees evidence that his choice of ... On to the main event for McCain, Obama Obama, McCain to Honor Victims of 9/11 Together Publ.Date : Sat, 06 Sep 2008 22:23:34 GMT Increase Web Traffic |
PARLOT::Ebooks, Scripts,
Websites, and more... 1. Deleting Errors in 48 HoursThis is the absolute fastest... Read More Getting worried that one of your clients, customers or patients... Read More Well now we add CitiGroup and UPS to the Identity... Read More Why do some people get offers for pre-approved credit cards... Read More Negotiable instruments like checks and drafts have become an indispensable... Read More Thanks to the Fair and Accurate Credit Act, American consumers... Read More A lot of people spend more money than they can... Read More With identity theft statistics currently at an all time high,... Read More These days, credit cards in the UK are competing with... Read More Owning a credit card can be quite an advantage. Whether... Read More There are three main credit bureaus in the United States;... Read More "Menis - the author translates as "indignant rage" - It... Read More The process of clearing credit can be laborious and frustrating,... Read More Getting your first credit card is a big deal and... Read More Q: I'm opening a gift shop and want to be... Read More "Cut Your Payments in Half!" the headline screams. "Consolidate Your... Read More It may seem like a simple question but its important... Read More Do you know the costs associated with your credit card?... Read More If you find that creditors are calling you almost daily... Read More Clean Credit Reports, your credit report contains information about where... Read More They arrive in your mail - a conspicuous looking mail... Read More How can I prevent Identity theft from happening to me?... Read More Almost all students have and use student credit cards. Some... Read More What do a shoe retailer, an online discount broker, and... Read More Whether or not you receive a loan and what interest... Read More
Adsense
websites
10 Ways To Boost Your Credit Score
Collection Agency Secrets for Collecting on Bad Debt
UPS Delivers the Goods, Your Identity
How to Evaluate and Raise Your Credit Score
Bad Checks, Bounced Checks, & NSF Checks
Its Your Credit - Take Care of It!
Credit Card Debt: How To Control It
How To Avoid Becoming A Victim of Identity Theft
0% Credit Cards
Credit Cards - A Blessing or a Curse?
Which Credit Bureau Should I Use To Check My Credit Report?
Why Americans Find Predatory Lending Offensive
10 Step Credit Repair Guide
Manage Your Credit Wisely
Credit Cards, Merchant Accounts, and Your Bottomline
Credit Counseling -- Why It Doesnt Work For Most Debtors
Credit Cards and How To Choose Them:
Credit Card Expenses Are Killing Your Budget!
Credit Problems? Heres How to Manage Your Creditors
Clean Credit Report: Easily Raise Your Credit Score 100 points
Credit Card Traps: How To Spot Them On The Spot!
How You Can Help Prevent Identity Theft
Student Credit Cards 101
Why Consumers Need a Nationwide Credit Freeze NOW
What Is a FICO Score and How Do I Make It Work for Me?
Affordable and Reliable Web Hosting Starting at $4.49/Month
Credit and Banking Money Saving Services
The first rule when applying for banking and credit services... Read More
Your Credit Score
Credit scores: all lenders use credit scores to determine interest... Read More
Good vs. Bad Credit Debt
Do you know the difference between good and bad credit... Read More
What You Didnt Know About Your Credit Card Numbers
Have you ever really looked at your credit card and... Read More
The Hazards Of Your First Credit Card
You probably don't need me to tell you credit cards... Read More
ChexSystems: Who They Are and How it Affects You
ChexSystems is a company that maintains a subscriber membership service... Read More
Student Credit Cards 101
Almost all students have and use student credit cards. Some... Read More
14 Common Credit Mistakes
Establishing credit and wisely managing your credit becomes easier when... Read More
Rate Tarts Losing Ability to Cherry Pick
A "rate tart" is someone who switches from one zero... Read More
Discover the Parts of a Credit Report and What They Mean
So you ordered a copy of your credit report to... Read More
Credit Score: The Brightest Feather In Your Financial Cap
Credit scores are the most important aspect that determines your... Read More
How To Save Money On Credit Cards
Some credit cards offer a cash advance option. But how... Read More
Finance - Money, Money
Finance is a big word for some of us. It's... Read More
10 Ways To Boost Your Credit Score
1. Deleting Errors in 48 HoursThis is the absolute fastest... Read More
Understanding Credit Card Penalties
Because most of us have one or two credit cards... Read More
What Happens When Your Credit Is Damaged? Do You Have Recourse?
The good thing about bad credit is that you can... Read More
Credit Problems? Heres How to Manage Your Creditors
If you find that creditors are calling you almost daily... Read More
What You Need to Know About Credit Reports
You hear people talk about credit reports all the time... Read More
Free Credit Report ? Watch Out for Scams
Many people may still not be aware of an amendment... Read More
How to Save Money on Your Credit Cards
Credit card companies make their money on the 85% of... Read More
Establishing Credit ? What You Need To Know Part 2
In my previous article "Establishing Credit ? What You Need... Read More
A Summary of the Fair Credit Reporting Act
This summary of the Fair Credit Reporting Act will explain... Read More
Legislators Ponder New Credit Protection Laws
Legislators in Washington, D.C. are considering several credit-related consumer protections... Read More
Identity Theft - How to Protect Yourself
"Like the tan? I got tons of sun on that... Read More
Credit Help for Real Estate Financing: Five Categories of Your Credit Score
1. Payment History -- 35%The number of accounts paid as... Read More
Credit |