Credit Card Information: Benefits & Risks

Today, almost every business accepts credit cards. Some businesses won't accept any other form of payment. For the average consumer, not having a credit card could limit your financial freedom. Particularly if you are financially responsible, there are numerous benefits to having a credit card, with few risks. For an irresponsible spender, owning a credit card could prove extremely detrimental.

Online Shopping

One benefit to having a credit card is the ability to shop online, where checks, cash and money orders are not commonly accepted.

Fees

The fees associated with credit cards can be costly. Interest fees can be up to 30 percent. Some credit cards charge application and annual fees.

Identity Theft

There is a much greater risk for identity theft when using a credit card.

Buyer Protection

Credit card companies often offer warranties and consumer protection for goods purchased with a credit card.

Irresponsible Spending

One of the greatest risks of owning a credit card is the ability to spend beyond your means. If you cannot demonstrate financial restraint and utilize a budget, a credit card may not be right for you.

Emergencies

One important benefit to owning a credit card is that it can be used as a back-up in case of financial emergencies.

References

• Choosing a Credit Card