Maybe you have one. Maybe you want one. Maybe you want another one. Can you guess this week’s topic? No, it’s not a baby. It’s a credit card. While there are several types of cards, the focus here will be on the pros and cons of having one, as well as not having one. So if you’re on the fence about getting a credit card, consider these advantages and disadvantages.

Advantages

1. Convenience: You have more purchasing options with a credit card. Whether you’re making a purchase online, over the phone or in person, a credit card can come in handy. I would, however, suggest carrying a few bucks to avoid holding up the gas station line for a pack of gum while the attendant asks for your ID and/or PIN number. Just a suggestion. J 
2. Emergencies: They can happen at any moment. You just paid for a brand new engine that the mechanic said was needed for your car to function and then…you come home to find your kitchen flooded from the faulty dishwasher you were supposed to fix weeks ago. Having a credit card can cover those unexpected expenses.
3. Improve Credit Score: Maybe you’ve had your eye on that red Chevy Corvette with 460 V8 horsepower or that dream house with a two door garage and swimming pool. All that can be yours with a healthy credit score (and maybe a winning lottery ticket!). Bottom line: having a credit card and making payments on time can help build a good credit score which is important if you’re looking to qualify for an auto loan or mortgage. Check out this video for tips to improve your credit score.
4. Pay Later: Depending on your spending habits, this could be a disadvantage as well. And while it’s best to pay off your credit card balance in full, you have the option to pay the balance over time. This helps your credit score and can keep that checking account intact for other things, like tickets to the next Taylor Swift concert.

Disadvantages

1. Overspending: When you purchase an item with a credit card, it’s almost as if you got it for free since there was no exchange of actual money. Sorry, but you may actually end up paying more than you intended when you see your monthly statement. It’s easy to spend more than you can afford with a credit card. So a good rule of thumb is to stay on top of your payments and make sure you have the funds to cover the charge.
2. Fees & Interest: Make sure you understand the credit card terms before signing on that application. Yes, you really have to read the fine print before buying your new dishwasher. Some of the phrasing may look like complicated jargon, but you’ll want to understand the details and safeguard yourself from any hidden fees.
3. Late Payments: Fall behind on payments, and you’ll soon find out why you were on the fence about getting a credit card. Late fees, penalties and interest can build fast and put you in a quicksand of debt. Your debt can grow if you only pay the minimum monthly balance and continue to make purchases. Stay disciplined on your charges and balances to avoid late payments. 
4. Fraud: Owning a credit card puts you at risk of fraudulent purchases. Thieves can obtain your information through stores or sites at which you’ve shopped. Keep an eye on your account balance and set up alerts so you know when the card has been used.

There are other aspects you may want to consider when applying for a credit card, but hopefully these tips will help you make an informed decision. And if you do decide to apply for one, a big take-away from this topic would be to use your card wisely; be smart with your purchases and avoid falling behind on payments.

That wraps up this month’s blog. Visit us on Facebook, Instagram or leave us a comment.

-U1 Marketing