Credit Card - Advantages and Disadvantages

Advantages as well as disadvantages of a credit card.

There are many types of credit cards available from VISA, MasterCard etc. Credit card is the major requirement currently. Everyone want to have a credit card as this can be asset for anyone if we use it very carefully. Otherwise this asset can be a liability for us as this is very easy to buy anything and that leads to extra spending. This article will guide you how to use the credit card carefully.
Credit Cards

Advantages of credit card

1. Credit card allows us to make any purchase without any cash.

2. We can make online purchase through credit card and then we can pay money in installments for our purchases.

3. With credit card we can get anything cheaper than market as there are many promotional schemes and discounts of the purchases on credit card.

4. Almost all credit card offers special benefits like cash back, insurance cover on loss and purchases, points and special discounts on travel and hotels.

5. We can withdraw cash from any ATM in emergency. Although this is very expensive but we can take benefit in emergency.

Disadvantages of credit card

1. The main disadvantage of credit card is the bank give us promotional offers to make purchase through the credit card that may lead to over expenses. The credit card company charge heavy interest on unpaid amount.

2. If robbed credit card like other stolen cash in the money bag. Anybody can use credit card to make any purchase. If we do not report to credit card company. We should report the credit card company immediately to block the credit card. We should check online status and transactions through Net-Banking account or credit card statement.

3. High interest rate can be big problem. We should make full payment within time otherwise banker applies higher interest rate on the outstanding amount.

4. If we make any payment through cheque and cheque bounce with any reason then credit card companies charge heavy penalty for this. We should make payment online using Net-Banking account or other online transfer to avoid this type of problem.

5. Credit card information in online transactions can be hacked by hackers so we should use credit card at reliable websites to make online purchases.


We should avail the facility of credit card and make sure nobody can misuse this. Also never write ATM PIN on credit card. Always keep it in the safe like other cash. Never give credit card information to any person evens the person claim that he is from bank. As the banker never ask such type of information directly. You should take an insurance for credit card and this will be beneficial if any loss happens. Always pay at least minimum amount withing due date otherwise you will need to pay heavy penalty. In the result we can say credit card makes life easier.

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Author: Ramachandran Pattabiraman25 Nov 2010 Member Level: Diamond   Points : 1

You are right dinesh,
I am holding a credit card which put knife on my neck in one time (as I spent much on that) but it helped me a great when my mother admitted in hospital for treatment. So, everything is in our handling - we should not blam the cards.

Author: DR.N.V. Srinivasa Rao25 Nov 2010 Member Level: Diamond   Points : 1

Having a credit card is very convenient. But we should plan our expenses very well otherwise we will become bankrupt.

Once I had been to a electronic goods shop. The remote of television set was not working properly. So I had gone to that shop for repair of that remote or to purchase a new remote.

I had gone there with my wife and two sons. After entering into the shop we have asked the shop keeper about remote. He asked us to wait a few minutes. Then we started seeing various TVs displayed in the shop. I got tempted and started discussing about going for a new TV itself. My elder son supported me. Second son is noncommittal. My wife seriously opposed. But somehow we convinced her and purchased new TV. If I don't have a credit card I might not have done this.

This is how sometimes our expenditure goes out of our control with credit cards.


Author: Ashok Goyal04 Jun 2014 Member Level: Gold   Points : 4

Have you replaced your Credit Card with Chip and PIN technology - Alert for Credit Card Holders in India

Earlier while using credit cards at point of sales one could swipe the card and make the payment. Such cards used the magnetic strip technology and such credit cards could be easily cloned. Now RBI has advised banks in India to replace all such credit cards with chip-based smart cards to their customers as such chip-based cards can not be cloned or misused. Transaction with such chip-based credit cards will get through only after the credit card holder authorises the transaction with PIN (Personal Identification Number) known only to the Card Holder.

Author: Pravat Kumar Das10 Sep 2014 Member Level: Gold   Points : 7

Credit card is a pre-approved loan from your bank.
It is calculated as per your salary or income source and then bank fixed a certain limit for every month or give a certain limit as loan to you.

And they give you this limit with a card which is known as Credit card.

That card can be used for cash withdrawal ( but you should not use that until unless it is highly essential as there charges are too high almost 3.99% per month).

Online shopping, card swiping at merchant etc.
The benefit of credit card is
1-you do not need to worry if you are short of cash in your pocket.
2-You do not need to carry heavy cash during your travel or shopping.
3- You get some time ( vary from bank to bank and card service provider ) around 45 days to repay your credit taken with out any fees or interest.

Disadvantages are-
1- Some time you loose control and unnecessary spend a lot of money on shopping and travel.
If you delay your payment then heavy penalty charges and interest is being charged by bank.
If card is mis used ( theft) then you need to suffer for some days until unless you get clearance from your bank you have to pay that amount etc.

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