Thrifty Thinking: The Pros and Cons of Using a Credit Card

In today's increasingly digital world, more and more people are turning to credit cards as a primary form of payment. The convenience of using a card cannot be matched by any other sort of payment. Not only do credit cards typically have higher spending limits than debit cards, but they are also ideal when traveling overseas because of the lack of exchange fees. 

A credit card is also an invaluable tool in helping to manage a budget and control debt. If used properly, a credit card can act as a master receipt detailing all of the month's expenses. This financial management can help consumers to categorize expenses and avoid needing a debt settlement program. 

Choosing a credit card with a generous rewards program can help you to accrue a variety of perks including free airline tickets or even cash back. Using credit cards also gives consumers a degree of theft protection because of the built-in security features. This can provide a peace of mind when making large purchases. 

Despite all the benefits of using a credit card, there are also a host of drawbacks related to debt accrual. Owning a credit card can make it tempting to spend money you do not have, landing you with substantial credit card debt. With the high interest rates associated with many cards, the balance can begin to accumulate quickly, making it even harder to pay off. Reckless spending can lead to consumers needing a debt settlement program. 

If not used responsibly, your credit score can take a big hit. Low credit scores and credit card debt can greatly affect your future borrowing power. Not only will a low credit score lead to fewer approvals, but it can also increase the interest rate for other borrowing needs such as car loans.