Remember there are pros and cons with credit cards…
You can get some awesome deals and perks with credit cards these days, but it’s important to read the small print too, in case there are serious downsides!
Advantages of Credit Cards
If borrowing for a short period, they can be less cost effective – Personal loans can be expensive to borrow than if you borrowed the balance off a credit card. The interest is paid on the remaining debt only, not the whole loan.
Flexibility – You can pay small amounts each month or can pay up to the total balance. There are no redemption penalties – In the case of loans, you may get penalised if you pay it off earlier than originally agreed.
Interest-Free Credit – Normally, up to 60 days interest free credit.
Phone/Online-shopping – if your card allows this then the world is your oyster!
Extras – Don’t forget that you can get all sorts of additional perks with credit cards like airmiles, travel insurance and store discounts.
And now the not so good news…:
If you withdraw cash, you will pay a higher rate – So many people misunderstand this and get into difficulties.
You exceed your credit limit – you have a limit, and if you try to go outside this you will either be refused in-store/online or the credit card provider will penalize you.
You could get into worse debt – credit cards offer a feature, which can make people, spend more than what they can actually afford.
Fraud is easier – When using your credit card remotely, you have a higher chance to be a victim of fraud as card details may be taken and used by a third party.