Cash or Charge? The Pros and Cons of Credit Cards


Credit cards can a lifesaver, if used properly and within appropriate limits. However, applying for a credit card will make a big difference to how you spend and save, so it’s worth thinking through all the factors, good and bad, before you commit.

If you’re considering getting a credit card but are unsure if it’s right for you, here information on credit cards that can help you make a decision.

Credit Cards – The Pros

Rewards – Many credit card companies offer rewards in the form of cash back, vouchers, discounts or even free travel. Depending on your interests and spending habits, you could potentially earn a free holiday or some extra cash just from using your card.

Protection – Unlike cash, if credit cards get stolen, they can be replaced without any financial impact. If you can prove you weren’t negligent or fraudulent in the theft, most credit card companies will happily refund any stolen charges.

Developing Credit – Being responsible with your cards, selecting low-interest low-fee cards to start with and paying bills on time can lead to a robust credit score. This can help you down the line if you ever need financing for bigger things like a home or car.


Credit Cards – The Cons

Price – Credit cards can be expensive. If you pay for something on credit, the sum accumulates interest and paying it off over time means you will end up paying more overall. This is a great argument for paying off the full amount by direct debit every month!

Debt – Without due care and attention, some people find themselves getting into debt with credit cards. While easily accumulated, living with debt is hard to pay off and takes time. This can prevent you from pursuing things such as moving overseas, traveling or accepting a dream job on a lower salary. Again, this is not necessarily down to the credit card itself, but to the way you manage your finances.

Lack of Patience – Being able to charge everything has the potential to limit creativity. Credit cards extend your financial capacity but this can prevent you from using ingenuity and patience to figure out how to thrive in your circumstance. Saving up and working towards something often leads to a greater sense of accomplishment than the instant gratification to which credit cards readily lend themselves.

The most important thing about credit is to budget properly and avoid frivolous spending as this will cost you in the long run.All of the potential drawbacks can be easily avoided by meeting your monthly payments and not spending more than you need or can afford. Using credit cards correctly can be a productive step toward financial independence and a great way to establish responsible spending habits.

37 Comments to Cash or Charge? The Pros and Cons of Credit Cards

  1. I agree that there are some pros to credit cards but as I have found more cons! It is harder to get out of debt then to get into it. IF there is a true emergency then yes, use them–otherwise if at all possible “leave home without them!” (wish I had known this years ago!!)

  2. My mom won’t let me have a credit card, I guess here’s a deeper reason why. Although I kind of made her use hers for my phone recently (I’m paying her though for the bills coming in) I kind of feel though it is better indeed to pay in cash..however, there are really just times that excitement get ahead over us so people go for the ccs :)) yes, that’s not good though XD I feel so bad now about it haha.

  3. We paid off our credit cards recently and cut them up. As far as I am concerned, they are the devil. That $50 pair of jeans I bought 4 years ago ended up costing me $120 after all was said and done.

  4. My Hubs uses credit cards, I don’t touch them. I really don’t like them. I was brought up being told if you don’t have the money, you don’t need it.

  5. I have a credit card but I’m very careful how I use it – I don’t like not being able to pay the bill in full when it comes in I have to say x

  6. This is a great list. When I first got a credit card, I was lucky to have parents who went over all of these pros and cons with me. However, I had so many friends who got into serious financial issues because they didn’t understand the cons of having a credit card and how to handle them. They just focused on the rewards and the instant gratification rather than the debt that was accumulating! When used responsibly, credit cards are great!

  7. What a good list of pros and cons to think about, especially during this busy holiday shopping season

  8. We have worked our way down to having only 1 credit card and it is for emergencies. We prefer to use cash or debit cards. Sure we don’t get the rewards, but it is much less likely we can stay within our budget and not overspend nor go into debt.

  9. I was just talking to someone about credit/debit cards last night because once again we’re being charged after we canceled something. So in the end I think it’s a big hassle however I must be able to buy stuff online so I have no choice but to use them. I do like the rewards. That’s also great that the money on the card is protected if stolen. But if only companies would stop doing shady things.

  10. I do not have a credit card and do not want one i like to not be in debt and that is too much temptation lol.

  11. I got into trouble with credit cards back in college. It took a long time to climb out of the hole and I try to be very careful with how I use credit now.

  12. I pay mine off every month in full and I only use it to separate business from personal expenses and to collect rewards. I’ve not carried debt for over six years and I’m planning on keeping it that way. :)

    They are convenient for renting cars, etc., making reservations, and for that blasted hold that hotels put on a card when you stay.

  13. Despite having a credit card, I still prefer to have cash & use that instead. I just know that if I limit the amount of cash I spend, I don’t need to use the credit card often.

  14. Maria

    I always use my debit but never charge on my cards. If I charge I want to be able to pinpoint every purchase. That makes me feel better about charging.

  15. I have a credit card but try not to use it often, only when I know we can pay the bill in full. Otherwise I try to save up for things I want.

  16. We love to use our credit cards because we are able to get mileage from the points. We always pay them off at the end of the month.

  17. We use our credit card for the rewards adn pay it off every month. There are pros and cons, being responsible is the hard part for many poeple.

  18. my husband and I closed all credit accounts a few years ago. There are times that it would be nice to have a credit card for incidentals, but we simply don’t need that pizza that we wouldn’t have purchased with our bank card. Pros and Cons, definitely.

  19. I go for Cash no more charged been there done that. Hehe! Now am free of charged.

  20. This is a great list of the pros and cons of credit cards.

  21. When I was single, I never had a single credit card. Over here, I have a few. We use credit cards for points especially for online shopping for security reasons.

  22. Everyone has a credit card nowadays and they use it for security purposes just like my mom. There’s nothing wrong about using credit cards but every cardholder should also know their responsibility at the same time.

  23. When I was young, I had too many credit cards. It was hard work to pay them off. Now I have two and use them for emergencies.

  24. Robyn

    I’m a total charger!

  25. I wish I could even get a credit card :( My SIL ruined my credit and now I have nothing.

  26. If you are responsible and make sure you stick to your budget, credit cards can actually save you money. I have one for our basic necessities and another that we use for “wants”. The one I use for groceries and utilities is a cashback card which saves me around 1000 pesos or more each month. The other one is for simple wants such as dining out and shopping. That one earns us rewards. The important thing is to make sure the entire balance due is paid every month to avoid interest and other charges. Oh and our annual fees are waived also. :-)

  27. We don’t do credit cards, hopefully never will either just to avoid any mess that may happen with them.

  28. I only use my credit card for emergency. Mahirap na mabaon sa utang. Hehe. :D

  29. it’s nice to have one especially if the need arises.

  30. There really is pros and cons to using them. Unfortunately the cons outweigh the pros for most people. It really can be easy to go into debt because of always being able to charge everything. The convenience of it all. I have an Amex that I only pull out in emergencies. Everything else is paid for with debit.

  31. There are times that I use cash but this morning I used my credit card when I shop to Kohls :-)

  32. patricia

    Credit cards can get you in so much trouble if used frivolously and not careful with them. I rather just pay if I have it then make more debt.

  33. This is definitely a great list of pros and cons. We have no credit cards in our home and are pretty happy. Some of the fees are crazy!

  34. credit cards would come handy especially in times of emergencies, but it can also be quite a temptation. one needs a lot of self-restrain + discipline not to splurge and go on a shopping binge, if you have a credit card in your purse waiting to be used! i plan to get one next year, but i will make sure to leave it at home especially when i go to the mall!

  35. What a wonderful post.. I hardly ever have cash on hand and use my CC for everything.. BUT we always, always pay them off at the end of the month.. I grab the bonus points and pay no interest…

  36. I don’t have credit card. My husband prohibited me from getting my own card. I use a debit card instead.

  37. My husband and I just chopped all of ours in half! We didnt want to get in debt!

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