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Are Credit Cards a Trap or a Boon ?

Is Credit Cards a Trap or a Boon ?

Whether the credit card is a friend or a foe really depends on how one chooses to use their credit card(s).

There have been mixed opinions on using credit cards as some have vowed never to use it further while others have considered it as a friend in need. So here let us touch upon the pros and cons of using credit card.


  • Easy Access to Credit: In case of need of emergency fund, credit card help you access easy credit at zero interest. The amount need to be repaid only in a time span of 50 days means you get plenty of time for repayment.
  • Incentives and Offers: While purchasing certain products through credit card, you get incentives, reward points and cashbacks. While using certain credit cards, the customers even get a 5 percent cashback on few products.
  • Record your Expenses: For those financially disciplined, this is one of the best mates available. It records each and every penny you spend thus tracking where your money goes and showing you where to put a full stop.


  • High Interest Rate: Never miss the credit card payment date as the soaring interest rate will further destabilise your finance. Most banks calculate interest rate as 2 to 4 percent for the outstanding bill per month which means the customers will have to pay 24 percent of the amount in a year. People have a notion that once you pay the minimum charges, you can avoid the interest which is not true. Interest will be charged for the remaining amount.
  • Creates a Spending Habit: Possessing a credit card makes someone confident of purchasing a product even if they don’t have cash in hand. This leads to people overspending with the credit card. Do not fall into this trap and make it a habit to use a credit card only in case of emergencies.
  • Hidden Charges: Banks may tempt us by providing charge free cards which will be free of cost only in the initial year. From the next year onwards, you will be greeted with charges like annual maintenance charges. So before you avail a credit card, make sure you are aware of all the applicable charges.

It is important to use credit card wisely so as to help you manage your finances and cover up the emergency expenses.


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