Credit Card Service
A credit card is a payment card issued to users (cardholders) as a
method of payment. It allows the cardholder to pay for goods and
services based on the holder's promise to pay for them. The issuer of
the card (usually a bank) creates a revolving account and grants a line
of credit to the cardholder, from which the cardholder can borrow money
for payment to a merchant or as a cash advance. The ease in swiping a
credit card for a purchase has its pros and cons. It may either help
when handled properly or become a detriment. If you are able to pay your
bills on time every month and not carry over a balance, credit cards
are a great convenience. The cards can also land you deep in debt. This
often occurs if you're unaware of the terms of the credit card agreement
and if you carry too many cards.
Pros
You can use them practically everywhere, especially overseas.
They can boost your purchasing power because they can be used to
buy goods and services over the phone, through the mail and online.
They provide financial backup in the event of an emergency, such as an unexpected healthcare cost, job loss or auto repair.
They allow you to purchase items and pay them off in monthly
installments. They offer discounts at stores and rewards. For instance,
when you make purchases using the credit card you can collect points;
these points accumulate and can be used to get free items, such as
airline tickets.
Some cards may offer cash back as an incentive to use the card.
They can help build your credit history.
They keep a record of your expenses, helping you to monitor your financial activities.
Credit cards allow you the right to dispute billing errors and defective merchandise.
They allow you with hold payments.
Cons
Credit cards can have their disadvantages, though, especially when they're used in an unwise manner.
Some consumers feel compelled to spend more money than they have.
Consumers may continuously roll over a balance for several months
When you default on credit card payments, you are charged with late fees and interest, increasing your debt load.
Carrying a lot of credit cards also isn't too favorable in the eyes of lenders.
Acquiring too much credit card debt can ruin your credit score.
Studies have indicated credit card debt as a significant factor in consumer bankruptcies.
Credit card fraud is a possibility.
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