All You Need to Know About Credit Cards

February 22, 2015 by  
Filed under Loan Funding, Quick Loan Funding

Credit cards are small plastic cards that grant you access to a certain amount of money provided by the bank. In order to know more on this, let’s dig a bit further into what credit cards really are, how they work, how they can benefit you, the ‘strings attached’, and their disadvantages..

The Purpose of Credit Cards
There is not much that a credit card does, but at the same time it is really helpful. A credit card holder can use the card for any legal transactions; however, there is a limit after which the user cannot access the money without clearing his previous dues. There is a fee or a charge of interest which is associated with every use of the card, which depends on your bank’s policies and the amount you utilize.

Disadvantages of Holding a Credit Cards
When you purchase goods or even services through a credit card, the money used belongs to the bank. However, you will have to pay the amount back to the bank as you borrowed the money from them. If you exceed the amount which you can pay back, it may become an overpowering liability that can affect your credit score. Having a bad credit score can cause you a lot of issues if you wish to apply for future loans or for many other purposes.

One of the downsides of owning a credit card is that you can easily get carried away with the amount you spend. Your failure to repay the bank may potentially expose you and your assets to legal accountability and heavy fines. If you are not able to pay the bank back and the amount is quite heavy, then the bank may even confiscate your property. The bank can take over your business as well or something of an equal value.

Advantages of Credit Cards
There are two faces of a coin, so where there are some disadvantages, there are also advantages. One of the best advantages of credit cards is the access it provides you to an ample amount of transactions, regardless of the time or location. If there are any emergencies, you can have direct access to money as many hospitals accept debit and credit cards both. You will not have to arrange finance from an external source when you can use the bank’s money and repay them later.