Credit Cards

A lot of people think that all credit cards do is give you more financial burden. While this may be true for people who are generally ignorant of the advantages these cards have, the truth is, there is more than one way to benefit from them. 

What are credit cards? 

Made of either plastic or metal, credit cards are instruments you can use to borrow money from banks. The whole concept of credit cards focuses on the “buy now pay later” mentality. But it goes way beyond that.


Different viewpoints

Before we jump into the advantages and disadvantages of owning credit cards, let us briefly look into the different viewpoints some financial experts have regarding this topic. 

Dave Ramsay

In general, Dave Ramsay is completely against having debt. According to this money management expert, having debt will only take away your freedom to use your money as you wish. 

Rod Griffin 

According to the Senior Director of public education and advocacy at Experian, credit cards are not for everyone. Moreover, Rod Griffin explains that only some people are able to consistently pay their credit on time.

Grant Cardone 

A renowned speaker, international influencer, author, and sales trainer Grant Cardone tell his followers not to worry about spending money or having debt. Moreover, Cardone stated in a tweet that “Your problem is never debt or spending, it’s income.” 


Pros of credit cards 

Aside from being able to buy things now and pay later, here are the other reasons why you should get yourself a credit card: 

Widely Accepted

Both physical stores and online stores accept credit cards as a mode of payment. 


    One common reason why people apply for credit cards is the incredible benefits they can give. For example, discounts to certain stores, travel rewards, and cashback. 

      Credit Scores

      Credit scores are numbers between 300-850 that determine whether a customer is deserving of credit. The closer your score is to 850, the more trusted you appear to lenders and other financial institutions. Consequently, if your score lies between 300-579, it is considered very poor. This means that lenders will most likely turn down your applications for loans. 

        Cons of credit cards

        Moving on, here are the most common reasons as to why people instantly reject the idea of having credit cards: 

        Interest charges

        A lot of problems arise when you don’t pay your credit on time. One of which is the high-interest charges. Expressed as annual percentage rate or APR, these charges generally vary from one card to another. Credit card companies apply these rates onto your unpaid balance daily. To compute the daily rate, simply divide your APR by 365. Basically, you end up paying more than you owe the company.  

        Tendency to overspend

        Having a credit limit can somehow convince you that you have more money than you actually have. And having this illusion will cause you to purchase items you cannot afford. This is the strategy of credit card companies to earn more revenue.

            These companies have three primary sources of revenue:

            1. The fees they give to the establishments involved in credit card transactions.
            2. The interest rates they apply to their customers’ unpaid balances.
            3. Other charges they give to their cardholders. 

            With this in mind, credit card companies encourage their customers to spend more money than they have to earn more revenue from interest charges.

            Higher chances of getting hacked

            Since credit cards can be used in practically any establishment, you become more vulnerable to fraud as a cardholder. Once hackers acquire the needed information, this will be sold to illegal marketplaces. This is one good reason why you should always be extra careful in making transactions with your credit card.