Jun 7, 2019 in Economics
The Pros and Cons of Credit Cards


Credit cards have revolutionized the way people across the world carry out daily transactions. Buying goods and paying for services can be a rewarding and an exhilarating experience. It could also be binding and regrettable. For many people, using credit cards is convenient and hassle-free. It is a joy for users in the sense that they have monetary freedom that is plastic in nature, therefore eliminating the need to walk with hard cash or carry huge loads of money. For some people, it could represent a burdensome experience in the sense that they could be swayed to use their cards to accumulate debts. Nevertheless, some people can maintain a reliable, responsible account that offers them a worthwhile experience. It is, therefore, an important question regarding owning or not owning a credit card. Whereas debts due to credit cards plague many people all over the world, credit cards are becoming the preferred means of transactions perhaps because of their flexibility and convenience of use. Below are some pros and cons of credit cards:

Credit Card Pros


Credit cards are perhaps so popular today because they are convenient. It is easier to use them to make payments or pay for services instead of using cash. Using the plastic that is the credit card comes in handy in paying bills at petrol stations, gas pumps, at the store or the gym. Compared to cash, credit cards become an easier alternative and greatly reduce the insecurity associated with transacting in cash. Most shops all over the world recognize and accept MasterCard, Visa, among other credit cards. Thus, it is possible to transact from almost any corner of the world.  Credit cards are compatible with most banking systems such that it is easier to walk into the nearest shop and buy goods or pay for services. A simple swipe of the credit card could take care of Lamborghini rentals or pay for Lunch tabs. Almost any kind of transaction could be taken care of by credit cards.

Peer Pressure

In the world that is tech-savvy, almost everyone has a credit card. It is, therefore, fashionable for everyone to be technologically appropriate. The mere reason that everyone understands how credit cards work makes credit cards seem like digital pets, a fact that comes in handy in the application of credit cards. It is fashionable and even convenient to watch friends and peers pay for drinks and meals using American Expresses. The experience would make one appreciate technology. It would perhaps be worthless to use a US debit card instead of credit card to foot for the salad special or soup bill. Owning a plastic piece of the credit card provides one with a sense of worth and belonging, assuming the platinum membership card into the retail and commerce world. For college students, owning a credit card means they are growing into adulthood. For the grown-ups, having a credit card makes them feel like a patriotic Americans. In any case, there is pressure in trying to be part of the convenient society of credit card users.


Research has established that it is rewarding to use credit cards. Many businesses have gift hampers and promotions for those using credit cards. In other words, it pays to pay for services and goods using credit cards. For instance, people who have worked long and hard to buy the last copy of Pirates of the Caribbean deserve to be paid for the time and energy they invested.  Depending on the credit card one uses, the rewards could vary. However, a broad range of options abounds and so one can choose to use only the credit cards that fit their lifestyle. Some cards offer sports merchandise, plane tickets, and the traditional old-styles cash. Other cards accumulate credits for credit card users and accord them the flexibility of obtaining whatever they want. As luck would have it, credits could be used to acquire Pirates of the Caribbean Digital Versatile Discs.


It is beneficial to use credit cards since one could earn gifts such as new jeans, among other presents. People who have used credit cards for a long period responsibly can build credits especially when they repay promptly, which could further increase their chances of obtaining a loan or servicing mortgages. In fact, the trick is to use a credit card wisely to improve chances of getting rewards in future. It is perhaps useless to have a credit card and fail to pay loans and arrears in time. As such, one could easily fall into debts (this will be discussed in the Cons section). Responsible use of credit cards helps one to build credit points that reflect their accountability and dependability.


Easy Borrowing 

By using credit cards, it is easier to buy costly goods or pay for expensive services. Where one does not have hard cash or even money in the account, credit cards come in handy for them. They could repay in flexible terms over a flexible period.  Also, credit cards are secure and easy to use and come in handy for online shopping. Credit cards are accepted anywhere in the world. Some credit cards provide zero per cent timeframes, which imply that one can benefit from interest-free loans. One only needs to clear their balances before the 0% offer elapses or otherwise rates of interest could apply. Usually, the mean interest rate is 17%. The figure is quite high, a factor that encourages users to pay early before interest applies. The flexible payment arrangements come in handy in helping people to manage their cash flows better, and perhaps be more financially disciplined. Some credit cards offer options to spend, such as loyalty points, cashback, or Avios air miles, implying that one could use their credit cards to make money. However, the initiatives only favor people who pay their bills in full Organization for Economic Co-operation and Development.

Switching Balance

Credit card users who owe money on their store or credit cards find it convenient to take out a new card: Those who use the option use the transfer option to reduce their balance from 18% to 0% interest rate option.  The transfer card thus comes in handy in evading high-interest rates. Although there is a transfer fee of 3%, it is worthwhile to use transfer cards since it allows one to reduce interest rates to zero. It is, however, advisable to pay debts before the 0% window elapses.

Consumer Protection

Using credit cards gives the user more protection than using cash, cheque, or debit card. It is easier for a user to get their money back if they buy goods or pay for services ranging between £100 and £60,260 in case anything goes wrong. In simple terms, if something wrong happens, such as faulty purchases, or poor turn of events, a user could easily claim their money back from the providers of the credit card.  They will also be protected in case their cards are used fraudulently since the card provider is obliged to refund the money. However, it would be impossible to get a refund if the card provider realizes that the card holder was negligent. It is thus significant to ensure that users closely guard their PIN and do not disclose them to other people.

Credit Card Cons

Late Payments and Debts

Using credit cards is dangerous in the sense that some people fail to pay in time. Thus, it is harder to remain debt-free. Interest, late fees, and penalties accrue at an alarming rate, and one could find himself making payments that only cover charges and do not cover the principal purchases. Frequently, owing to late payments, many people sink into credit card debt with no alternative out. The companies seem to be taking advantage of people's needs to borrow and live beyond their means. Debts are compounded by fees, interest charges, and penalties due to late payment. People who cannot maintain credit card payments are advised not to own a credit card. 

Hidden Fees

There are hidden charges that credit card providers fail to tell users. For instance, they never mention the processing fees and start-up fees. Annual fees can sometimes go beyond $100, thus burdening credit card users. As such, it is important for a user to check the fine print and intricate details of the contract.


 A major negative aspect of credit cards is the fact that they encourage overspending. As people buy items or pay for goods without using real money, they feel that they are not paying. The truth, though, is that they have to pay monthly and may pay more than they intended to. Penalties, hidden charges, and fees are also an extra burden to credit card holders. It is thus advisable for people to develop financial discipline and avoid impulse buying. They could have a well-defined budget that includes only the necessary items.


Credit cards have without a doubt revolutionized the way business in conducted in the contemporary society. They have made the world a convenient place where one can buy good or pay for services by a simple swipe of the card. They come in handy for people who may not be having money at the moment. As expected of technological advances, though, credit cards have their pros and cons as discussed in the paper. Pros include convenience, security, easy borrowing, etc. The cons include debts, poor spending, and hidden charges.



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