Do you use Credit Card? – Know the pros and cons

September 13, 2019

Over the years, the number of Credit Card users in India has grown significantly. Whilst it has made the payment easy and helped the users gain valuable reward points, it also has a downside. Read on to know the pros and cons of having a Credit Card.

Today, many people in India use Credit Cards. The ease of use, easy repayment options, discounts, offers and other benefits of using Credit Card are unmatched by any other financial product. However, excessive use of Credit Cards can be a major problem, it can push into a financial debt and before you realise it, you could find yourself in a desperate situation. If you have no experience using a Credit Card or if you are planning to apply for one soon, it would help to know the Credit Card advantages and disadvantages.


  • One of the biggest advantages of Credit Card is that it gives the users easy access to credit. By using the card, you can purchase anything you want now and pay the amount later. The money used for the purchase does not go from the bank, thus it does not affect your savings.
  • If used well and if you are disciplined with your repayments, Credit Cards are the easiest and the efficient way to build your credit score and establish your creditworthiness. Based on your Credit Card usage and repayment history, the banks approve or disapprove your loan applications.
  • If you want to make a large purchase like an expensive phone or furniture without touching your savings, you can use your Credit Card for the purchase and repay it in EMIs. Paying through EMIs is much cheaper than opting for a Personal Loan as the interest rate for these loans can be as high as 20-25%.
  • Another significant credit features and benefits is that most cards come loaded with a wide range of incentives and offers like the reward points, cashbacks and air miles. Also, there are many retailers that offer special discount on purchase of products through Credit Cards, which helps you save a significant sum.
  • One of the lesser known benefits of having a Credit Card is that when you purchase anything with your card, all your transactions are recorded and the details of the same are sent to you every month through the Credit Card statement. You can use the statement to keep track of your expenses and chalk out your budget accordingly.
  • Most banks in India offer purchase protection when you sign up for their Credit Card programme. This would help you recover losses, in the event of loss, or theft of the card.


  • Credit Cards have many fees and taxes like late payment penalty, annual fees, processing fees, joining fees and renewal fees. Make sure that you do your research well and compare Credit Card rates before you sign up.
  • If you fail to pay your Credit Card dues within the due date, the debt is carried forward to the next month along with the interest on it. The interest is accrued over a period and the interest can be quite high.
  • Although there are plenty of security measures for online transactions, there is always a risk of being a Credit Card fraud victim. There are many fraudsters who use advanced technologies to clone a card and gain access to your Credit Card information, which can then be used for purchases. To avoid this, you must carefully check your monthly statement and look for any suspicious transactions and inform the authorities immediately about the same.



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