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Credit cards: Advantages over debit cards and disadvantagesBY: David Prakash Kumar | Category: Business and Finance | Post Date: 2009-07-07
A credit card is a ‘buy now, pay later tool'. A debit card is a buy now and pay now tool. Both debit cards and credit cards have their own advantages and disadvantages. The advantages of credit cards over debit cards are more. A debit card is actually linked to the bank deposit account of the card holder. When a person uses a debit card, the money is debited from the bank account. In contrast, a credit card is like an unsecured loan that the financial institution like banks and other such organizations provide the person. When we use the credit card, it means that we intend to repay the amount with interest, if we are not able to repay the balance fully, every month. Credit cards have their own advantages and disadvantages. The advantages of credit cards are: 1. We are able to purchase the items without worrying about our bank balance. 2. The person does not need to carry cash white going for shopping. 3. There is a record of the purchases that we have done, when we purchase using the credit card. 4. This type of payment method is more convenient than writing cheques for each purchase. Another fact is that many shops do not accept cheques due to the delay in cashing them at times. 5. Credit card payment also consolidated the bills that need to be paid into a single payment. This saves a lot of time and effort. The disadvantages of using credit cards are: 1. There is an interest and finance amount charged to the card user. This causes a higher cost of the items that are purchased than it would be, if it were not purchased using a credit card. 2. There may also be an additional fee charged by some credit card companies that is sometimes termed as transaction charges. 3. The users can sometimes get into financial difficulties if they lose track of the amount spent on various purchases. This is also not a good thing for compulsive shoppers who may actually end up using more than their actual credit limit and will end up paying an extra penalty. 4. This can lead to an increased impulsive buying and the user may regret later for purchasing certain things. These are the advantages and disadvantages of using a credit card. Credit cards have actually revolutionized the way in which a person shops. The credit cards have many advantages and disadvantages. So the onus is on the user to use it prudently and wisely. Article Source: http://www.saching.com About Author / Additional Info: I am a physiotherapist by profession. A writer by interest. I take up freelance assignments for various websites and blogs. Comments are welcome at prakashdavid@rediffmail.com Additional Articles: * Important benefits of internet marketing and internet based businesses * Looking after old parents * Weird Words for a Weird new World * Cyber crimes - Internet bane. Online crime prevention and security * Television: Harmful Effects in Social life Does this article violate or infringe on your copyright ? It is a violation of our terms for authors to submit content which they did not write and claim it as their own. If this article infringes on your copyrights, then use our Contact us form with the detailed proof of infringement along with the offending article's title, URL and writer name. If you do not hear back from us then contact us again in another 10 days. Thank you. Comments on this article: (0 comments so far) * Additional comments are now closed for this article *
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