Talking about financial matters, the advantages of credit cards are very helpful. Urgent needs can come at any time but emergency funds are not always there. With a credit card, you don’t have to worry because there’s always money you can count on.
A credit card is a financial product that allows you to borrow funds for various purposes. Apart from making purchases, you can also withdraw cash with a credit card. You must pay your loan money back along with the interest according to the agreed terms.
If you want to have a credit card, it is important to know the advantages and disadvantages of a credit card for consideration. Credit cards have several advantages, one of which is as follows:
1. Help in an Emergency
The advantages of credit cards is that it helps in emergencies and urgent needs. For example, such as having to pay for medical expenses, pay for education, and various other needs. You can use a credit card to meet your important needs and pay for it at a later date.
2. Fraud Protection
Banks help protect you and your purchases from credit card fraud. If you see a charge that you don’t recognize, contact your bank immediately so that it can be followed up. If your credit card is lost or stolen, be sure to report it to the bank so that your credit card will be blocked immediately.
3. Easier to Track Expenses
All purchases with your credit card are tracked and recorded by the bank. Credit cards provide detailed reports on where and how much you spend. This can help you make budgeting easier than recording every cash transaction in a ledger.
4. Build Credit Score
Your credit card account details and payment history are an important part of your credit score. If you always pay your credit card bills on time and are never late, this information is very useful for building your credit score.
This can increase your chances of getting approval from other products, such as loans from other financial institutions, application for vehicle loans, to financing for home installments.
5. Online and Offline Transactions Made Easy
Your shopping transactions are now easier with a credit card. You can use a credit card for buying and selling transactions both online and offline. With a credit card, you don’t need to carry large amounts of cash, so shopping is safer and more practical.
The advantages of credit cards are many, but credit cards also have disadvantages that are important for you to know. Credit cards charge monthly interest, annual fees, cash withdrawal fees, and various other fees. So, consider carefully if you want to have a credit card.