What are the advantage and disadvantageof having a credit card?

Question

What are the advantage and disadvantageof having a credit card?

Answer 1

Advantages

Builds your credit rating

Allows you to have some short term free financing  (assume you buy off balance in full)

Lessens the need to carry large amounts of Cash

Certain cards will also give "rewards" (bonus miles/extend warranties)

Disadvantages

Can cause over spending

Interest rates high if balances not paid off

Answer 2

Because good credit allows you to get important loans for things that you can't normally save to pay cash for - home, auto etc.

But, it also effects your Insurnace rates. Bad credit = higher rates.

When i was very young I thought credit was optional. Now I learned good credit is a nessessity unless you have a lot of money burried in your back yard.

Bad credit = high interest rates if you should find someone to give you credit. So bad credit costs you a lot of your hard earned money.

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http://www.bestcreditrates.net

Answer 3

There are many reasons on both sides of your question.

Including abuses on both sides.  Plus there are stories abound some complete and others, incomplete or tales.

Pro:

Credit rating, required for jobs, renting, large purchases.

Emergency funds

confirming ID

accounting and tax records

Con

if careless overspending

Monthly payments

Lost cards

bad credit ratings if late or missed payments.

Interest rates

A comment: In our society, not having a credit card when applying for loan can be a mark against you.  Then again, it depends on the lender.