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Posted by Revive Financial on Apr 6, 2016 12:00:00 AM

It’s no secret that the evolution of the credit card has made it easy for us all to swipe and shop. But with this modern convenience comes a frequently overlooked problem – long-lasting debt.

When you’re not able to pay back this debt each month, the bills quickly keep piling up and you may find yourself in financial strife. This is why debt management is so vital.

Luckily for you, we have created this article to highlight the pros and cons of credit cards to help you determine whether or not they are the right choice for you.

The Pros of Credit Card Usage

They’re ideal for travelling

Credit cards are more than useful for travelling overseas because they can be used anywhere. For example, if you are in France and suddenly run out of cash (or are worried about keeping cash on you) you can use your credit card instead.

They’re convenient

This is especially true for online shopping or for making purchases over the phone. You can also pay off items in fortnightly or monthly instalments and even receive discounts for using your credit card.

They can be used for backup

If you get a nasty surprise in the mail – such as a forgotten electricity bill – you can quickly use your credit card to cover it. Likewise, if you suddenly lose your job or fall behind in your mortgage, you can use a credit card as a safety net in the meantime.

They help increase your credit score

Credit cards, when used appropriately, help signal to lenders that you are reliable in making payments. Your credit history relies on this ability, so they can be a great way to prove your financial worthiness.

They help with debt management

You can track your spending and see where your main expenses are. It is always best to continually monitor your financial activities to determine where any existing holes might be.


The Cons of Credit Card Usage

They can easily be misused

If you’re not good at keeping spending to a minimum, things can quickly get out of hand. For those who have trouble with debt management, you might want to think twice before getting a credit card.

They often have unclear terms

The terms associated with credits cards are often overlooked and many consumers aren’t aware of what they are getting themselves into. For this reason, always carefully examine the terms and conditions of your credit card prior to signing up.

They come at a cost

Not only will you need to pay interest, chances are you will be slapped with late fees if you can’t pay the money back on time. This increases your amount of debt and could be the start of financial turmoil. Credit cards are also a significant factor in many bankruptcies.

Too many credit cards can reduce your loan worthiness

If you have too many credit cards, this could signal to lenders that you may not be able to pay off a loan or mortgage. This goes without saying so it may be best to only get one credit card if absolutely necessary.

The Verdict

Ultimately, the choice to decide whether or not you actually need a credit card is up to you. We hope you have taken the above points into consideration when evaluating your options.

For more information on personal insolvency, check out our personal insolvency page here.

Topics: Personal Insolvency, Budgeting, Debt Consolidation, Personal Debt, Debt Management Solutions

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