Advantages & Disadvantages of Credit Cards
You wonder whether you should use credit cards or rather rely on cash or other payment options?
Great! This article is exactly for you since I will show you the pros and cons of credit cards in the following chapters.
Advantages of Credit Cards
- Credit cards are pretty light
- Credit cards may be more hygienic than cash
- Non-contact payments are often possible with credit cards
- You don’t have to worry about losing lots of cash
- Using credit cards may make your life easier
- Paying by credit card may be more convenient
- You don’t have to go to the bank to get cash when using credit cards
- Credit cards can make your life more efficient
- Credit cards are an easy method for buying things online
- You may not have to remember a PIN code to use your credit card
- Using credit cards may be better for our environment
- Credit cards make payment processes quicker
- Most shops accept credit card payments
- You can use a single bank account for all your credit card payments
- Paying with credit cards is trendy
- Credit cards can be regarded as the next step after cash payments
- Paying via credit card doesn’t require lots of knowledge
- You don’t have to calculate your change when using credit cards instead of cash
- You may be able to build a good credit history using credit cards
- Credit cards can help you overcome difficult financial conditions in the short run
- You may get reward points for using credit cards
Credit cards are pretty light
One advantage of using credit cards instead of cash is that credit cards are pretty light compared to coins and you therefore don’t have to carry lots of weight for payment purposes with you but just need a single plastic card to make your payments in an efficient manner.
Credit cards may be more hygienic than cash
Since you don’t have to carry lots of used cash with you, credit cards can also be considered more hygienic and you may therefore be at lower risk of catching diseases and may just feel more comfortable in your skin in general in the long run.
Non-contact payments are often possible with credit cards
If your credit card allows you to make non-contact payments as most credit cards out there do, this can make your payments even more hygienic and safe from a health standpoint since no other people will have to touch your card while cash will be used by thousands of different hands and may become quite dirty and contaminated.
You don’t have to worry about losing lots of cash
Another upside of credit cards is that they make cash obsolete.
If you have a reliable credit card company and a solid credit card, there is no need to take lots of cash with you and you may therefore also be at pretty low risk of losing your cash or getting robbed compared to people using cash on a regular basis.
Using credit cards may make your life easier
In general, since credit cards are just pretty easy to use and you no longer have to take lots of cash with you during your shopping trips, they can just make your life easier since you have to worry less about losing cash and may be able to enjoy your shopping trips much more due to that.
Paying by credit card may be more convenient
You should also know that paying via credit card can be more convenient than paying with cash since instead of searching for the correct cash amount in your pocket, you just need to hand over your card or swipe it and you will be good to go.
You don’t have to go to the bank to get cash when using credit cards
Since you no longer have to use cash payments during your shopping trips, you also no longer have to go to the ATM to get cash and this may not only save you lots of money but may also decrease your risk of getting robbed sooner or later.
Credit cards can make your life more efficient
Another benefit of credit card payments is that they can also make your life much more efficient since you no longer have to worry about whether you take enough cash with you or not but can be sure that you will be covered by your credit card as long as your bank account is not in the dark red already.
Credit cards are an easy method for buying things online
Also in case you don’t like shopping in person in traditional stores, owning a credit card can still make quite a lot of sense since for paying online, credit cards are pretty popular payment options and you can therefore use them in almost every online store.
You can even use your credit card buying gold or other precious items online without having to attend a shop in person.
You may not have to remember a PIN code to use your credit card
While some credit cards require you to enter a PIN when making payments, others just require your signature and you will be good to go and you may therefore not have to remember your PIN all the time but can go shopping even if you forget about it one day.
Using credit cards may be better for our environment
Since the use of credit cards doesn’t require the use and production of physical cash, you may also be able to do good for our environment in the long run since your credit card use may contribute to saving some paper and other natural resources.
Credit cards make payment processes quicker
By using a credit card, you can not only do good for yourself but also for others since payments via credit cards are pretty quick and easy and people standing in line will greatly appreciate electronic payments since they are often much faster on average compared to cash payments.
Most shops accept credit card payments
You will also barely find big shops that don’t accept credit card payments.
In fact, the use of credit cards has become pretty popular all over the US and even the world and you will therefore find more than enough opportunities to use your credit card on a daily basis.
You can use a single bank account for all your credit card payments
Since your credit card is usually connected to a bank account, you will also see all your transactions in this one bank account and will be able to have a quick and efficient overview of how much you have spent and may also use additional software to keep your finances under control so you don’t spend far too much in the long run.
Paying with credit cards is trendy
You should also know that due to hygienic and many other reasons, the use of credit cards is pretty trendy right now and by paying via credit card, you may become cool within your circle of friends and may not have to deal with snarky comments as often as cash payers might have to do.
Credit cards can be regarded as the next step after cash payments
Electronic payments via credit card can also be considered the next step in evolution after cash payments.
In fact, our world becomes increasingly technologized and by using electronic payment methods, you just fit into those developments since cash may become obsolete in the near future.
Paying via credit card doesn’t require lots of knowledge
Since paying by credit card is pretty easy, it also doesn’t require lots of knowledge on your side since you just have to swipe your card, sign the receipt and you will be good to go most of the time.
You don’t have to calculate your change when using credit cards instead of cash
Also in case you are not really good at math, using credit cards instead of cash can be great for you since you don’t have to calculate whether the change you get is correct since you will not get any change but you will just pay via electronic systems and the correct amount will be charged from your credit card and your bank account as long as the cashier types in this correct amount.
You may be able to build a good credit history using credit cards
If your bank account is in green and you are easily able to pay your credit card balance on time, you may also be able to build a really good credit history which may help you get a loan and may make your life easier in various other parts of life.
Credit cards can help you overcome difficult financial conditions in the short run
In the short run, credit cards may also be a great way to overcome difficult financial periods since you may be able to pay with credit cards during times you may already no longer get cash from the bank and other loans may be out of the question so you may still be able to pay for the most urgent things while you can dig yourself out of your whole in the following days and weeks.
You may get reward points for using credit cards
Many credit card companies also reward you for using their credit cards and you may therefore be able to collect many points, especially if you use your credit card for business purposes where you can get many points and miles and can turn them into nice things or free flights in the long run.
As you can see, there are many reasons for using credit cards.
However, it is still not all sunshine and we also have to talk about the drawbacks of credit cards in the following so you will be better able to decide whether you still want to use credit cards or rather want to use classical cash payments or other payment options instead.
Disadvantages of Using Credit Cards
- You can forget your credit card at the shop
- Your credit card may fall into the wrong hands
- Other people may use your credit card for shopping
- You may lose control over your expenses by using credit cards
- You may spend more money by using credit cards instead of cash
- Higher risk of getting into debt when using credit cards
- You may lose your feeling about money and how much you can spend
- Yearly fee for credit cards can be pretty high
- High interest rates on credit card debt
- Credit cards may incentivize you to go into debt even further
- Credit cards may not be entirely safe
- Your private information may be sold on the internet
- Shops may get more information about you than you might have liked
- Old people may not be able to use credit cards in an efficient manner
- Using too many credit cards can be problematic
- Not all shops allow you to pay with credit cards
You can forget your credit card at the shop
One problem with using credit cards is that it is pretty easy to forget them in stores and if you are not careful, this may happen multiple times and you may have to call your credit card company to lock your card so no harm will be done to your account.
Your credit card may fall into the wrong hands
If you are not careful and forget your credit card, you may also get into serious trouble in case the wrong person finds your credit card and uses your information for buying expensive stuff and this may financially ruin you in the long run.
Other people may use your credit card for shopping
Since other people may be able to use your credit card for their own shopping plans in case you lose them, you may also just have a pretty bad feeling carrying your credit cards with you and this feeling may make your shopping trips far less enjoyable since you may always have to worry about those things, especially if something like that already happened to you before.
You may lose control over your expenses by using credit cards
Another downside to credit cards is that you may also use control over your expenses.
For instance, you may buy a classic car or other nice things you may just not be able to afford and may regret it later on.
In fact, many people who use credit cards just don’t realize how much they actually spend and while you might stop shopping once your cash is used, you will have almost unlimited opportunities with your credit card to make pretty poor financial decisions you may regret later on.
You may spend more money by using credit cards instead of cash
In general, it is also pretty tempting to spend more money with credit cards than you would have done with cash since it may just not feel like real money but rather like play money and you may not realize this until it is too late and you see how much you have harmed your bank account.
Higher risk of getting into debt when using credit cards
You should also be aware of the fact that many people using credit cards are at much higher risk of getting into debt since they just lose control over their spending behavior and don’t realize when enough is actually enough since they don’t have to pay the piper when they go shopping but just weeks or even months afterward.
You may lose your feeling about money and how much you can spend
Another disadvantage of using credit cards is that since they are just made out of plastic, you may lose your feeling for money since you may not feel like using real money but may be in your own shopping bubble until it finally bursts and you may see the full financial mess you have created.
Yearly fee for credit cards can be pretty high
You should also not forget that you often have to pay a yearly fee for your credit card and depending on the type and the opportunities your card will give you, those fees can be pretty high and if you already struggle to pay your bills right now, you may not want to take on those additional costs.
High interest rates on credit card debt
Many people also underestimate the high interest rates you have to pay on credit card debt and if you are not careful, compound interest rates may get you into lots of trouble since you may just no longer be able to pay back your debt and may become increasingly desperate due to that.
Credit cards may incentivize you to go into debt even further
Since you don’t have to pay credit cards expenses right now but often have a term of credit, credit cards may also incentivize you to get into debt even further since it may be your only option to make important payments and you may therefore get into a vicious circle of increasing debt and fewer alternatives to pay your bills.
Credit cards may not be entirely safe
While credit cards are pretty safe payment devices, they are still not entirely safe and many people use credit card fraught to get rich while customers all over the world may have to deal with lots of trouble.
Your private information may be sold on the internet
Using credit cards also means giving some information about yourself away to credit card companies and this information may end up on the internet sooner or later in case credit card companies get leaked or other mistakes happen.
Shops may get more information about you than you might have liked
If you pay via credit card, shops also get lots of information about your shopping behavior in the long run and may no more about you than you may have liked or expected which may be pretty creepy.
Old people may not be able to use credit cards in an efficient manner
While it is pretty common to use credit cards for young people since they are just so used to electronic payment systems, the older generation may still struggle to use those modern payment technologies and may just not feel comfortable with using credit cards so paying cash may still be the better option for the older generation.
Using too many credit cards can be problematic
While using a single credit score and paying your bills in time may improve your credit score, using too many credit cards may be problematic since it may hurt your credit score and you may also lose control of your payments and may have to deal with serious debt sooner or later.
Not all shops allow you to pay with credit cards
While most shops in the US allow credit card payments, some smaller shops may still not accept electronic payments and may just take cash from you so you may not be able to use your card in those shops and it may still be a good idea to take some cash with you also in case your credit card may just not work properly anymore.
Top 10 Credit Card Pros & Cons – Summary List
|Credit Cards Pros||Credit Cards Cons|
|Credit cards are a convenient payment method||Yearly fee for using many credit cards|
|Using credit cards is pretty safe||High interest rates on credit card debt|
|You no longer have to take cash with you||Using credit cards may get you into financial trouble|
|Credit card payments may be more hygienic than cash||You may lose control of your expenses by using credit cards|
|You no longer have to withdraw cash from the ATM||You may spend more with credit cards than with cash|
|You can lower your risk of losing lots of cash||Too many credit cards may hurt your credit score|
|Paying via credit card is trendy||You may forget about big expenses|
|Credit cards help you buy things online||Credit cards may not be great for the older generation|
|Credit cards are accepted by almost all big shops||Many people don’t know how to pay off credit card debt|
|Credit cards may help you pay your bills in the short run||Credit card fraud is pretty common|
Should You Use Credit Cards?
While credit cards can be a convenient payment option and can just make your payment processes much more efficient and you don’t have to take lots of cash with you anymore, the use of credit cards can also be pretty risky since it leads many people to lose control over their expenses and to get into serious debt.
In the end, it is on you to evaluate the advantages and disadvantages of credit cards yourself so you will be better able to decide whether the use of credit cards makes sense for you according to your personal preferences and circumstances.
About the author
My name is Andreas and my mission is to educate people of all ages about our environmental problems and how everyone can make a contribution to mitigate these issues.
As I went to university and got my Master’s degree in Economics, I did plenty of research in the field of Development Economics.
After finishing university, I traveled around the world. From this time on, I wanted to make a contribution to ensure a livable future for the next generations in every part of our beautiful planet.
Wanna make a contribution to save our environment? Share it!