The Advantages & Disadvantages of a Credit Card

 Is There a Future Without the Credit Card?

At a time when cash or cash is gradually disappearing, when online shopping is increasing, and when even state institutions offer to pay fines and taxes online, the credit card is becoming increasingly essential.

Today, 2 major players share the market: VISA and MasterCard .

Everyone tends to have their own credit card, and often they approach their own bank for this. Very often we will accept what is offered to us, but is this the right choice? Are there alternatives? Above all, the bank will have sold us the advantages of the credit card, but what are the disadvantages?

What are the 10 most Important Advantages of a Credit Card?

Let's take a look at the main advantages of a credit card: 

1. You have less money with you, the risk of losing your money is nil!
2. A major advantage of the credit card is that it is accepted almost everywhere (small shops, department stores, activities) and also at an unparalleled international level.
3. You do not need to exchange money in advance when you go abroad. You can also pay in other currencies with your credit card.
4. Online shopping becomes possible, many retailers ask for a credit card to make the payment in their webshop.
5. To rent a vehicle, you can leave a deposit with the credit card without being charged.
6. You are insured against fraud.
7. You save up to a month in the future because all the money you spend is only debited from your account the following month.
8. If you have a financial problem, according to the terms of your contract, you can repay the money in installments. But be careful with the interest rates that apply.
9. You will receive a monthly overview with all costs incurred.
10. Some credit card offers offer loyalty, purchase and travel insurance, and permanent discounts on your purchases.

Free or affordable,… There are credit cards for every budget and every need. 

What are the Disadvantages of a Credit Card?

1. As long as you repay on time each month, no interest will be charged. Otherwise, a credit card quickly becomes expensive. The rate can be about 12% APR.
2. Sometimes there are annual fees associated with the credit card, which can range from €5 to €570, depending on the card. If you rarely use your card, it can come across as an unwarranted cost.
3. There are often fees charged for withdrawing cash from ATMs. Check the terms of your card and choose to withdraw cash with a debit or debit card.
4. Your expenses are not directly debited from your account, but once a month. This can be difficult to control in some cases. So beware of surprises when it comes to billing.

How can you protect yourself and avoid the disadvantages of a credit card?

• If you need money for a period longer than 2 or 3 months, take a personal loan , which is much cheaper.
• Do you often have to withdraw money from the ATM with your credit card? Don't forget to compare offers and choose a provider that offers enough free withdrawals for you.
• You are afraid of overspending and having bad news when you get your monthly statement. There are two solutions available to you: Ask to adjust your monthly usage limit to a more reasonable amount. The other drastic solution is to take a direct debit from a credit card or even better a prepaid credit card . By choosing this alternative, you no longer take any risks.