Weighing the risks and benefits of paying with credit cards:

by Tammy Martin Blogger

If you are thinking about applying for a new credit card, you should always know the risks that are involved. Just like any financial tool, there are certain things that you must be aware of when it comes to paying using "plastic". Hopefully, you will find & compare your next credit card on creditspot.org. The first step in making the correct decision with your credit card is to find the right one. You can then weigh the risks and benefits of using it, by considering the following factors.

Risks of credit cards

Paying with a credit card has its disadvantages and dangers. But as we will see below it is up to you completely not to fall into these problems.

Ease of overspending

Being a simple means of payment to use and not be necessary to have the money in the account at the time of purchase is very easy, if you do not have a bit of control, spend more and get into debt.

It can hurt your savings

This can be surprising if we take into account that among the advantages of paying with a credit card is having a better control of expenses.

Yes, there is a better control of the expenses but paying by card often gives the feeling that you are not really spending so, in the end, you spend more.

The money in cash does not have this problem, on the contrary, it causes a psychological effect by which we avoid spending to a greater extent.

Benefits of credit cards:

If you do end up using credit cards, properly, the benefits will far outweigh the risks. Here is what you could potentially gain if you use credit cards regularly.

Better protection

Most credit cards have a policy of protection of purchases made with the credit card. American Express will pay you for the repair or replacement of the item you purchased within 90 days of purchase. Or you will be refunded the money charged to the card. This is ideal for purchases of expensive items.

Mastercard adds a very interesting service. If you buy an item with your MasterCard card and find an equal but cheaper one during the 60 days after purchase, MasterCard reimburses you for the difference. Visa also has similar protection programs.

Ease of use

Without a credit or debit card, it is really complicated to shop online. Yes, there are ways but they are much more complicated and without the security that comes with paying with a credit card. Virtually every establishment accepts credit cards, which makes payment through plastic very convenient.

Rewards and points

The biggest benefit of using credit cards is the rewards programs that most companies will offer. You could potentially earn back money from your purchase if you used such points program. The way this works is that every time that you use your credit card, you earn points of some sort. You can then use those points in the future, for example, as cash backs to your credit.

You can avoid almost all of the risks that are generally associated with credit cards, as long as you find & compare your next credit card on creditspot.org. Getting the right credit card to suit your lifestyle is always the first step in making a good financial decision.