Credit Card: Pros and Cons

There are many advantages and disadvantages of owning a credit card. While, it makes it easier to pay without having to carry cash, it also charges interest on the amount paid with the card.

Credit cards are a form of payment method that allows the card holder to pay for goods and services based on the holder's promise to pay for them. The card holder pays for the goods by borrowing money from the bank, with the promise of paying the bank with interest on the borrowed money.

The issuer of the card creates a revolving account and grants a line of credit to the cardholder, from which the user can borrow money for payment to a merchant or as a cash advance. Having a credit card is a huge responsibility that many people can end up misusing because they don’t physically see the money going out of their pocket. Hence, it is said that one should be very careful with their expenditure when using credit cards. The credit cards come with many advantages and disadvantages of having it.

These are pros and cons of owning a credit card.



  • Not having to carry cash in hand
  • Easier to pay by simply swiping
  • Reward points or cash back policy
  • Protection against purchases
  • Makes it easier to purchase items for which the card holder cannot pay for all at once
  • Allows payment over months
  • Credit cards allow payments to be returned if something goes wrong
  • Some 0% interest cards mean that the cardholder can borrow money without any interest
  • Builds a credit history
  • Can be used universally (globally)
  • Can be used in emergency situations
  • Cards can be misused by the cardholder
  • Interest rates
  • Hidden charges such as late payment fees
  • Tempts over spending
  • Ties up future income
  • Late or faulty payments can result in destroying the user’s credit history
  • Carrying multiple cards can seem unfavorable in the eyes of the lender
  • Credit card fraud is a possibility



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