What is Credit Card? What are the Benefits and Disadvantages of Credit Card?

     Hello Friends, Today I am going to talk about the Credit Card, its advantages and disadvantages and much more about the Credit Card.




       Generally, we take credit card for online shopping, it is like a loan which you have to return to the bank after shopping. Though it is not easy for everyone to obtain a credit card but if you have a government or private job then banks will easily allot the credit card to you.

      If you are thinking about to take a Credit Card or if you are already a Credit Card holder then you should know the Advantages and Disadvantages of Credit Card. Because if you know these then you can use it properly. If we are talking about the SBI then it is hard to obtain its credit card because this bank collects all your information regarding your salary, job, etc. If you don't have a job, then it is not easy to obtain Credit card from SBI. But at the same time , it is easy to obtain it from other private banks.

     Now the question is, when we need to have a Credit Card? When you are shopping online that time there is an option of Credit Card for payment and if you do payment by using Credit Card then you will get some discount in bills. Besides this, there are so many international websites which accept only credit card payment. In such cases , we need to have a credit card.

    Here I am going to tell you about the advantages and disadvantages of the Credit card in detail, so that you can understand Credit Card better. Though there are advantages of Credit Card but also there are some disadvantages of it, which we should know.

   Then let's start..

What is Credit Card?

       Sometimes we want to purchase something but we don't have enough money in our bank account, in such condition Credit Card can help us. By using Credit Card we can take instant loan amount and can purchase these things.

     Credit card has some limit such as time period for returning the amount taken. If you repay the amount in time then you don't have to pay interest on it. But if you fail to pay in time then you have to pay the entire amount in the form of Credit card bill.

     Hope you understand what is credit card. Let's see what are the benefits and disadvantages of Credit Card.


Advantages of Credit Card :

  • By using this card, we can purchase more than the amount in our bank account. It is not related to the amount in our bank account.
  • Credit card can help to increase your Credit Score. If you pay the Credit Card bills in time then your Credit Score will increase. Banks give loans on the basis of Credit Score.
  • If you shop by using Credit Card you will get reward points and cashback. Though it is not big but more you shop by using Credit Card more you will get reward and cashback. You can use these reward points for your next purchase.
  • There is no possibilities of fraud regarding the Credit Card. But if the fraud is through the shopping and if it proves then the bank will not charge the charges regarding that.
  •  there is no annual charges on Credit Card. This means that you don't have to pay any separate charges on this card.
  •  By using the Credit Card you can purchase anything on EMI basis. The amount will automatically deducted from your Credit Card.
  • At the end of the month you will get the statement. So you will get all the information regarding your shopping. It can help you for making the budget.
  • Because of Credit card you will get loan of some amount without interest for specific time period. when you are purchase or pay by using Credit card, the bank will give 50 days for the repayment. If you pay that amount within 50 days then bank will not charge any interest on it.
  • We don't have to keep cash with us. We can purchase or pay anything by using Credit card. This will help to promote the cashless transaction.
  • Because of Reward points and cash backs , we can save ample of money.
Disadvantages of Credit Card:

  • Many people doesn't know that there are some hidden charges in the Credit Card. Most of the time the bank doesn't tell you about that the hidden charges are included in our Credit Card bill.
  • If you pay the Credit card bill late, then the bank will charge you a separate amount under late payment rule which is high. Also if you spend more time for payment then bank will  charge that amount along with the interest.
  • Most of the time, bank will not store the data of your payment done on international websites, because the bank only keep record of the payment which is done in our country only. In such condition, there are chances of fraud from the international websites.
  • For purchasing beyond the limit of your card, there are some extra charges. Suppose if your card limit is 50000 and if you purchase more than 50000, then bank will charge extra amount along with the interest.
  • If we don't pay the Credit Card bill, then the bank will charge interest on it on daily basis and this interest will increase day by day. For   

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