Credit cards have become an essential part of daily life, helping people manage everyday expenses with ease. Whether it is paying bills, shopping, or travelling, credit cards have transformed lifestyles and made it convenient for people.

That said, like any financial product, credit cards come with both advantages and risks that users should be aware of.

Advantages Of Using Credit Cards

Convenience And Safety

Carrying large amounts of cash is no longer practical. Credit cards offer a seamless and secure way to shop online or make digital payments at stores, making everyday transactions quick and hassle-free.

With growing concerns over the safety of physical cash, credit cards provide an added layer of protection. Even in the event of loss or theft, the card can be instantly blocked by contacting the bank, minimising the risk of misuse.

Discounts, Cashback Rewards, Points

Credit cards make everyday spending more rewarding by offering cashback and reward points on routine purchases like groceries, utility bills, and more. Most credit card providers include these benefits as part of their payment programs. The accumulated points can later be redeemed for various perks, adding extra value. Users also often enjoy exclusive discounts at partner merchants, helping them save on regular expenses.

Credit Score 
Using a credit card responsibly helps individuals build and improve their credit score. Timely bill payments and disciplined financial behaviour are key factors in maintaining a strong credit profile.

Emergency Fund

At times of unexpected emergencies in life, credit cards work like a financial safety net. It helps you get access to immediate funds, ensuring that people don’t have to witness unnecessary delays in addressing their needs.

Disadvantages Of Using A Credit Card

High Interest Rates

Credit cards come with high interest rates, which can vary based on the type of card and the user’s credit history. When using a credit card, you are essentially borrowing money from the bank. If the dues aren’t paid on time, the outstanding amount is carried forward and interest is charged at a higher rate, quickly increasing your debt.

Overspending And Overuse
While credit cards allow you to make purchases without having to immediately pay for them, this at times can become a major drawback when people go on to spend more than their limit. This happens because the money does not get deducted from bank accounts immediately, like debit cards.

Hidden Charges
These have a number of hidden charges that get included in the overall expenses. There are also several taxes and fees attached to it, such as joining fees, renewal fees, processing fees among others.

Credit Score Damage
Using a credit card carelessly can result in damaging your overall credit score, making it harder to avail loans in the future.

. Read more on Personal Finance by NDTV Profit.Credit cards, like any other financial tool, have their own set of pros and cons that customers must know before availing the service.  Read MorePersonal Finance 

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