What is credit card - pros and cons?

credit cardA credit card is a plastic card which can be used to make payments. The card entitles the holder to pay for the purchase of goods and services with a promise that he will pay for them at a later date. The bank or the company that issues the card to the holder  a line of credit from which the card holder can borrow money as per the limit and pay for the goods and services. Possessing a credit card has many advantages to the holder. Carrying a credit card is much safer than carrying cash especially huge amounts to buy something expensive. There are many times when something unexpected and urgent comes up and money is needed. A credit card comes in very handy in such situations when one does not have enough cash. There are many services that a customer can avail of because of the credit card they hold. They help the card holder to make purchases and pay for them later, get cash, and also provide security pledges. The credit card though has its own set of advantages and disadvantages also. The credit card power can be misused which can cause a lot of problems for the card holder. There are many people who keep making purchases on the credit card thinking they will pay the interest. They do not realize but very soon they have too much debt on their head and this causes major problems to them as repaying huge amounts becomes a huge problem. A very safe thing to do is to pay the monthly bills of the credit card as per the due date given by the issuing company in order to avoid any interest. Apart from saving the interest, paying credit card bills in time also increases the credibility of the payer. This shows that he has a good track record and when his credit worthiness has to be calculated this becomes very helpful. With credit cards people keep spending without keeping a track of where and how much money they are spending. One has to sometime pay for the purchases and it may happen that expenditures are more than incomes which poses a big problem.  Credit cards are a powerful and convenient tool but one needs to take extra care in using them else they may land up in a big problem.

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