Monday, November 30, 2009

Credit Cards: how the disadvantages may outweigh the benefits for some

Posted by Lindsey Connell

Credit card companies try to get you to spend as much as possible because the more you spend, the more they benefit. Credit card companies receive a percentage of each transaction a credit card holder has and these companies bank on the fact that the more a holder spends, the better chance that they will borrow more money with the company’s high interest rates. If the holder then exceeds their credit limit, the companies charge additional fees, which can be expensive. By relying on a credit card for most purchases, it makes budgeting and saving money more difficult and can often times lead to debt. Although carrying a credit card seems more convenient than money, the disadvantages of it seem to weigh heavily over the advantages. Hidden fees and penalties associated with credit cards often surprise many card holders because making purchases with a piece of plastic doesn’t always feel like spending money. Although credit cards seem dangerous, they are also useful for people who are responsible and stay on top of their payments. For those who have a secured amount of money coming into their possession soon but not at the moment, they can purchase something on credit now and pay for it when they get the sum of money. This is a major advantage that credit cards have over cash.

No comments:

Post a Comment