Benefits and Pitfalls of Credit Cards

With all the products offered having credit cards seems to work in your favor, however, were going to explore some of the benefits and downfalls of having credit cards. We want to be able to go on vacations, purchase fabulous bags, clothes, jewelry and millions of other things we don’t need. However, there are plenty of things we buy with credit cards that we do need.

You can buy now and pay later.

Who doesn’t like this option! You get to keep the cash you have in your pocket or if you don’t have the money to purchase you can still charge it and walk away with your merchandise. This is a main attraction to some when referring to credit cards.

You’re rewarded for good payment history.

Your credit thanks you for making on time payments which is beneficial when you’re ready to purchase or lease a vehicle or when you’re ready to purchase your first home. Most credit card companies have programs that reward you for making your payments on time. Not only does it show up positive on your credit report but some also increase your credit limits after so many on time payments and for making the minimum payments. With good payment history some credit card companies will also let you skip a payment which allows you to skip one month of payments and it’s not tacked onto the end but it saves you money just in case you have a rough month.

Credit cards help improve or establish credit history.

A lot of companies will not give you the time of day if you have credit challenges or if you don’t have credit cards can help to establish and improve your credit history. Although you may not have much credit having no credit is almost on the same level of having bad credit. Unfortunately most people don’t give you breaks when it comes to having poor or no credit. All I can tell you is to be aware of your credit history, score and negative marks on your credit report. Knowledge is power!

Minimum payments prolong paying off the overall balance.

I’ve learned this the hard way that making the minimum payments on credit cards does nothing for the interest. If you make more than the minimum payments it will go towards the interest which will be more beneficial to you in the long run. I had a credit card that was a low limit and because I made the minimum payments it really did nothing for the interests and they kept raising my credit limit because I was making on time payments. Needless to say I had to take myself off the program because I didn’t know how to control myself.

Be aware of your credit limits.

You always want to make sure you pay attention to your balance. Can you make the minimum payment if you lost your job today? For those payments that are two hundred plus this may present a problem. I will say it’s easy for you to let them consume you. Before you even get close to that point pay attention to your balance and what you can financially do on your own. Once you figure that out you will be in better shape than a lot of other people.

It’s your choice to accept credit card offers but try and keep these things in mind. A lot of companies offer 0% financing for several months take advantage of those but with everything be responsible; if you can try and pay off the balance every month. One of my very good friends and her husband will make purchase and pay it off the next month. I’ve never been able to do that but am optimistic that one day I will but until then I keep my bills under control that way if I’m ever in a situation where I lose my job which I have been I won’t be consumed by debt.