As a continuation of Pros and Cons of Having Credit Cards (Part 1), here is some additional information regarding the advantages and disadvantages of relying on credit cards for the majority of your financial transactions. While Part 1 focused on the cons of having credit cards (i.e., the benefits of using cash over relying on credit cards), here in Part 2, we will focus on the pros of having credit cards.
Some of the benefits of having credit cards and not solely relying on cash and/or debt cards for all of your financial transactions include (but are not limited to) the following:
- Having protection in the event of theft or fraudulent purchases – When a credit card is stolen (or your personal information is used to make fraudulent purchases with your account), credit card companies have protections in place that will prevent you from having to pay for these fraudulent purchases. However, if you solely rely on cash and/or your debit card, you will not have such protections and will be at a loss in the event the cash or your debit card is stolen.
- Building credit history and a good credit score –It’s no secret that it takes some work to build a good credit score, and a key component of this effort involves having a history of using and making payments on at least one credit card. For those who do not have any credit cards, they can have a far more difficult time securing car, home or other loans in the future, as they will appear to be risky borrowers due to their lack of a credit history.
Although there are pros and cons to having credit cards, the key to having them without burying yourself in debt is moderate use of them.
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