Credit Card Advantages and Disadvantages

Advantages of using credit cards:

Even though Credits Cards are meant to act as a form of financial convenience, many people across almost every age group feel weary about the system. While misusing a Credit Account can definitely have negative affects on your score, understanding the fundamental concepts on how to correctly use a Credit Card can have a significant positive impact on your finances:

You need credit to build credit. Having a credit card is an easy way to build your credit history early and increase your score.
Credit cards can provide a quick source of funds in an emergency, though you should avoid using a credit card for an emergency that exceeds 30% of your monthly credit allowance.
There is no accrued interest on a Credit Card bill if it is paid on time and in full each month.
Some Credit Cards have fraud protection that can allow for refunding and credit score restoration when identity theft is reported promptly to your credit card company.
Many cards offer consumer protection if losses are reported promptly which can extend warranties on items you purchase and provide protection against lost or damaged items shortly after you purchase them.
Credit cards can offer cash back or reward points that can be redeemed for items such as travel miles, merchandise, or gift cards.

Disadvantages of using credit cards:

Credit cards may require established credit-worthiness before you are approved for a card (student credit cards are largely the exception and can allow you to build credit)
They can allow for impulsive and unnecessary purchases that you may not be able to afford.
Credit cards often have high-interest rates which translates to high interest if not paid in full by the due date.
Some credit cards have annual fees which can become expensive over the years.
Credit cards charge additional fees on top of interest if you do not pay on time.
Improper usage with result in a negative effect on both consumer credit history and as a result, credit score.