Credit Card – Boon Or Bane

While credit card or plastic money offers a lot of convenience, it comes at a price. Although, it has become an inseparable part of our lifestyle, it requires a serious thought. A question that you must ask yourself is, whether plastic money is a boon or bane. It certainly has many advantages that cannot be overlooked. However, it also has some disadvantages that need to be considered before splurging. Carelessness and lack of control over your spending habits can put you in credit card debts. They can be difficult to overcome and can ruin your credit standing. Here are some of the advantages and limitations of using a credit card.


Credit period: When you make purchases with a card, you get a credit period. This means that, there is no need to pay the money immediately. It can be a boon if you have a cash crunch and need money for an emergency. It also enables you to withdraw cash from an automated teller machine but the rate of interest can be quite high for cash withdrawals.

Reward program: Most of the card lenders will have reward point program. This means that, every time you purchase something with a card, you can earn reward points. These points can be redeemed against gifts.

Safe: Using a credit card is safer than carrying cash. Instead of using bulk cash, you can swipe a card for making payment.


Temptation to splurge: When you have plastic money in your purse, it is much easier to splurge. It can be difficult to resist the temptation to overspend or shop. Moreover, the money does not go from your account immediately. This is another reason for losing control. Indeed, it can be indulging.

Debt: If you run up your bills and make only minimum payment each month, you will end up in debts. The rate of interest and late payment fee is quite high. You may have to incur several other financial charges.

Credit rating: Lack of control over credit card usage can affect your credit scores. It can mar your credit rating and reflect like a black mark on the report. Non-payment or late payment can further affect your future borrowings. It can tarnish your credit worthiness in the market.

Plastic money can be a boon if you use it carefully. Over indulgence can be dangerous. Do not fall in the trap of credit card debts. Use your card wisely.