Pros and cons of credit cards

Category: credit


Have you thought about giving up credit cards altogether, but not sure if it’s the right decision? There are both advantages and disadvantages to consider when it comes to credit card use. Some of those pros and cons include:

Credit card advantages

The opportunity to establish credit

Even if you’re not too fond of the idea of credit cards, responsible credit card use can be one the best ways to establish credit. If you ever want to buy a home, you’ll need good credit in order to qualify for a mortgage, unless you plan on buying the home in cash.

Extra money as a last resort

Although a credit card should never replace an emergency fund, credit cards can provide some peace of mind. It can be comforting to know that you always have some available credit in case something unexpected should come up that you don’t have the cash for.

Larger purchases

This may be an obvious advantage, but it’s one worth pointing out—credit cards allow you to buy things you may not have been able to afford otherwise. They allow you to borrow money and make payments toward your larger purchase until it is all paid off.

Travel planning is easier

If you’re making reservations online or booking excursions, a debit card will usually do the job just fine. In some situations, however, you may need a credit card when making your travel plans. Renting a car, for example, usually requires a credit card. And if you have a credit card that offers rewards, you may have the opportunity to collect points on any purchases you make, which can eventually be redeemed for discounted (or free) travel.

Credit card disadvantages

More bills to worry about

Unless you plan on paying your credit card bill in full each time you charge on it, carrying a credit card balance just means one more bill to think about each month. Depending on how big of a balance you have and how much you pay it off each month, this can be an extra bill that hangs over your head for a long time.


As with any loan—credit cards included—there are interest charges to consider. And if you don’t have the best credit, but you want a credit card, you may need to settle for one that has a high interest rate. This means those large purchases you make become even more expensive over time. When you calculate just how much you might spend in credit card interest over the years, it might not be worth it.

They can do more harm than good

While credit cards can be good building blocks when it comes to bringing up your score, certain habits can actually have the opposite effect. For example, if you only make minimum payments and your credit card is maxed out, you might actually see a drop in your credit score.

You can get into debt

For many consumers, it’s tempting to use all or most of their available credit for things they don’t really need, and it can be easy to justify expensive purchases because they’re going on a credit card. Overspending or relying on credit cards too much for daily expenses can easily rack up hundreds—or thousands—of dollars in debt. Credit card debt can take years to get rid of, and if you keep making small payments and then charging more again, it can be a never-ending cycle.

Do you need extra cash to pay down credit card debt? If you’re receiving long-term structured settlement payments, Peachtree Financial Solutions may be able to get you your cash sooner. Contact Peachtree today to learn more about selling future payments for a lump sum of cash.


Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.

Tags: Credit Cards, debt, interest, monthly bills, travel

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