Are there reasons for credit cards? Do we really need them considering that so many people are getting into severe credit card debts? Practically everyone from teenagers to retirees, most people have at least one credit card. There are advertisements all over the place. You can see them in newspapers, billboards, television and radio amongst others. You also get many direct mailers from credit card institutions.
The credit card is simply a financial arrangement between you, the card user, and an institution, which in most instances is a bank, from whom you can borrow instant money with a promise that you will repay them in the future. The institution then agrees to give the money you need and they expect you to pay them within a certain time. If the full balance is paid monthly in a timely manner, you will not be charged any extra. Otherwise, you will incur an additional charge, which is the interest amount.
There are many reasons for credit cards in our daily lives, making it a useful tool for today's consumers.
1. Convenience
You may not have ready cash in hand, but you can buy what you need using your credit card. It also means that you do not have to carry a whole lot of cash around.
In some instances, like online-based shops and store, such as Amazon, they mainly accept payment through credit cards. Having cash will not help in such cases.
2. Emergency Protection
Credit cards come in very handy in emergencies, like if your car breaks down or you need to repair some equipment and do not have cash in hand.
3. Security
It is very risky to be carrying around a large amount of cash. If the cash is lost, there is almost no way to get it back. If you lost a credit card or it was stolen, you can report this immediately to the institution that issued the card so that they can cancel the card and stop any further charging to the card. They will then give you a replacement card within a few days.
4. Traveling
If you travel often, whether within your country or internationally, it is much more convenient and safe to use a credit card.
There are many reasons for credit cards becoming a useful and convenient tool. They must however be used responsibly. It even helps in keeping detailed record of expenditures. However, remember that if you delay payment, you will incur interest charges. If you are not careful, you can get into a difficult debt situation. So, be prudent in how you use your credit cards.
