Credit Cards: Do You Really Need Them?

Read on and know how a credit card can impact your finances and your life.

14:09 31 March 2013

Today, having a credit card is a seen by many people as being a must. They are very easy to use and in some instances, merchants require them.

For example, if you’re booking a flight and if you want to do it online, you can just provide your credit card information and viola! You get your eticket without standing in line and in the comforts of your own home.

Credit cards work on a system commonly referred to as “revolving credit.” You can borrow money as long as you do not exceed your credit limit. For example, if your limit is £1,000, you are allowed to use a part or the whole amount at any time.

Once the credit limit is reached, you will not be allowed to use the card until you paid some of it off. Having a credit card has its own pros and cons.

Convenience is what makes them extremely attractive. Don’t have cash but want to buy that new gadget you just saw in a store? No problem, just swipe the plastic.

The main disadvantage is that it makes it difficult for people to track their expenses. This is the reason why a lot of people get the shock of their lives when they get their billing statement. Also, they encourage over spending as it allows you to spend the money you don’t even have.

If you’re somebody who is disciplined enough to pay off your balance before you incur charges and interest, having a credit card is ideal. However, if you’re an impulsive buyer, having a credit card can do you more harm than good.