Credit cards as a necessary evil - Knowing the benefits and the pitfalls

Finally, people are asking, if they really need a credit card to make their necessary payments. From meager beginnings in the 1920s, the credit card industry has exploded over the last few years, thanks to computerization of society. Consumer spending has been revolutionized due to credit cards and they’re also the reason behind the changing face of business. In fact, in the current economy, credit cards represent a vital part of business, household and global activity.

Despite the importance and vitality of these magnetic stripes, there’s always a paranoid within the nation regarding the soaring credit card debt. Credit cards have given birth to identity theft, an abusive and criminal activity that is recently making headlines. Therefore, in an attempt to find out if credit cards are really necessary, we have detailed out the pros and cons of carrying these little plastic bodies.

Get the most from your credit card - The significant benefits

Helps you build your credit history: One of the biggest advantages of owning a credit card is that it can help you build your credit history if you use it wisely. By using your credit card regularly and making timely payments on it, you can easily build a solid credit history that will speak about your financial worth when you meet the lenders

Helps you save money: When you use your credit cards responsibly, you can improve your credit score. With a higher credit score, you can indeed qualify for low interest rates on a mortgage loan or a car loan or any big-ticket item down the road. Having to pay low amounts as interest rates is indeed an effective way of saving money.

Helps you stay on top of a number of things: When you become a responsible user of your credit cards, you can stay on top of your finances and a number of other things.

  • You can keep track of your expenditures. Make sure you save all the receipts so that you can check them against your monthly statement and spot the errors right away.
  • If your credit has been misplaced and you notice any kind of suspicious charges, call the number on your billing statement or that is embedded at the back your credit card. In most cases, you won’t be responsible for the charges accrued when your account number has been stolen.
  • If you have online access to your account and your issuer offers some additional security alerts, you can leverage those options so that you’re automatically notified about any suspicious activity on your account.
  • There are many credit card companies that offer you date reminder options. You may even sign up for such reminders to avoid being charged a late fee for silly mistakes.
  • Check if your credit card company has a damage protection option. There are some who offer financial protection if you purchase merchandise and it turns out to be defective.    

Helps you arrange cashless travel vacations: It’s indeed a menace to carry cash while traveling. Reserving a room or renting a car will especially be a tough job if you don’t have a card as you have to exchange the currency and there are many other hazards associated with the process. Again, if you have some potential cards in your wallet, there comes a certain kind of relief as you know that you are protected, irrespective of the location you are in.

Helps you finance a big-ticket item: Taking out a mortgage is becoming more and more tougher these days, especially with the introduction of the new mortgage rules. The first thing that most lenders ask for is your credit score. If you haven’t got a card yet, there won’t be any credit history to show the lenders and moreover, you’ll find it very hard to prove before the lender that you are responsible with money. Hence arises the need of owning credit cards.

Helps ensure protection and security: Your hard earned money is more safe if kept in a plastic card than in liquid form. Once the liquid cash is gone, it’s gone for ever. But if you cash is in the bank and you are spending it through either a credit or debit card, breaking through might be a bit difficult for any prig. Even if your card gets stolen, the enhanced security measures would make sure your hard earned money is safe. With a credit card, all it takes is a simple phone call to prevent any loss due to identity theft.

The pitfalls of using your credit cards

Credit cards are reasons for identity theft: Identity theft is a crime that has become increasingly common nowadays. What is it that made identity theft so popular? It is nothing but the credit cards! There are identity thieves everywhere who are trying their best to steal your personal information in order to misuse it.

Credit card debt has soared due to extreme misuse: There are some credit card companies that charge hefty penalty fees for payments that are late by a day or two. This is when your monthly payments unnecessarily increase and you tend to fall in debt when you start defaulting

Misusing credit cards lead to a poor credit score: Carrying a large amount of credit card debt automatically has a detrimental impact on your credit score. The more is the debt amount that you carry, the more will be the plunge in your credit score. However, this is true only when the plastics are misused.


Credit cards are indeed a necessary evil. While they’re extremely important in our daily life, misusing them can turn the small plastics into nasty little debt generators. Credit card debt can be repaid by getting help of the professional debt relief companies or by following some budgeting or DIY debt payoff strategies.

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