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Credit cards have certainly taken a big leap from just being a plastic card payment. Gone are days when these can only be used at diners or restaurants. Today, almost every other merchant and establishment accept credit card payments.

As the years passed, the features and provisions of credit cards have greatly been enhanced to meet the demands of many cardholders. Indeed, when properly managed, owning a card can be beneficial.

In this article, let’s talk about the pros and cons associated with what they call “plastic money”. Hopefully, this post can enlighten consumers, particularly young people who are thinking about getting their first credit- about the importance of responsibility and self-discipline in using credit cards.

The Pros

Build solid credit history. Using a credit card is an easy way to build good credit history. As you regularly use your card and pay your charges on time, you are also building up your credit rating. For students, a student credit card is a great choice since these cards do not require a security deposit as secured cards do.

Convenience and safety. Compared to bringing cash, it is safer to use a card since you can simply call up your bank and have your account locked in case of theft or loss.

Handy during emergencies. Credit cards can be a wonderful lifesaver in times when you need something in an emergency but you don’t have the money at the moment. In this case, you can charge the purchase to your credit card and just pay by month’s end.

The Cons

The risk of bad credit. Yes, you can build good credit with a credit card but there is also the other side of the coin. When used carelessly, a credit card is also a quick way to accumulate debts and fall to the trap of bad credit. This is why all credit cardholders, especially students, are warned against choosing the wrong card, acquiring too many cards, maximizing their limit or missing their payment due dates.

You could end up paying more. Another risk factor associated with credit cards is the cost. Aside from the interest rate, there are finance charges that you need to watch out for. Late penalty, over-the-limit penalty, balance transfer fee, and other transaction fees can really add burden to a cardholder. A purchase that was originally worth $30 can end up to be $50 or more because of the extra fees.

The temptation to spend. One of the biggest challenges about having a card is controlling your spending. Since you can always charge it to your credit and think about repayment later, many card owners are prone to splurges. For teenagers, shopping with a card can be a real danger.

Don’t Let Your Credit Card Control You!

Clearly, the benefits as well as the risks greatly depend on how you manage them. You need to be the one in charge. Never let your credit card control you!

For instance, just because something is on sale does not mean you should buy it and charge to your card. Carefully consider if it’s something you really need, if it’s something that will be useful for you, and if you will be able to back your credit card on time. If you have doubts, it’s best to pass up the purchase until you have the cash to pay for it.

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