Everything you need to know before applying for a Credit Card

A credit card is a handy financial tool that enables the cardholders to make purchases on credit. From paying utility bills to online shopping, buying home appliances, groceries, you can do much more.

Banks and financial institutions offer different credit cards for salaried, self-employed and business owners. The amount used in the current month should be paid in the next month along with some interest if applicable. With credit cards, there are several advantages like rewards, cash backs, and interest-free period and much more. At the same, they do have some cons.

If you are thinking to get a credit card, you should definitely check the list of pros and cons of having a credit card. This will educate the possible risks and perks of using credit cards in the future. Let’s check ‘em.

Pros of having a credit card

There are certainly more benefits than risks involved in using credit cards if you use it in the right way. Below are some of the main benefits you will get:

Purchasing power

As you don’t need to pay in cash, credit card opens up a wide variety of options to shop from. You can use it worldwide – local, overseas, and online through phone, laptop via the internet. You can plan to purchase an expensive gadget in EMI which you couldn’t afford to pay in full.


Credit cards have infinitive possibilities of providing rewards in the form of cash backs, reward points for shopping items on a daily basis.

Apps like Bookmyshow, Justtickets have huge offers like 30% cashback when you using a credit card. And at the same time shopping sites like Amazon also offers huge cash backs for purchasing through a credit card.


Credit cards let you buy now and pay later. If you are spending a lot of car repair, you can opt to pay it using your credit card. This will allow you to keep your checking account intact. You can pay the balance on a monthly basis.

One more major convenience is that you don’t need to carry the cash in hand to pay at any outlet.

Expense Tracking

Credit card companies will send you a detailed report every month about each and every transaction you made in that month. This will give you an idea of the amount of money you should start saving and cut back extra expenses.

Builds credit history

Credit card companies send your account information to the major credit bureaus like CIBIL on a monthly basis. This will help you to build a solid credit history or rebuild your credit score fairly quickly. You don’t even need to spend huge using your credit card. As long as you have your account in good standing, positive information will fill your credit reports.

Theft Protection

Credit card companies have many restrictions in place to protect your purchases from credit card fraud. If you have ever lost your card, you must instantly report it. Under the Credit card Act, you are not liable for the transactions took after you have reported it stolen or lost.

Cons of having a credit card


Credit card companies offer you some limit to spend currently you do not have it in your pockets yet. That means it is kind of a loan from credit card companies and you need to pay it later with interest. If you start considering it as your own money there is a high chance for you to get into debts.

The best way is to spend an only certain portion of your card limit which you can pay it easily.

Interest and fees

Reading the conditions and terms can be really hard because the documents are extensive and really confusing. They use intrusive words to outsmart the customer.

I suggest you read through the complete document before applying for the credit card. And pay the credit card bill within the grace period to avoid more fees.


You have assured Zero liability for unauthorized transactions made with your credit card. But applying for a dispute can hassle. Fraud can also cause temporary damage to your credit report if it is leading to missing the EMIs.

Mounting debt

Most of the cardholders pay the minimum amount and keep making purchases. This can lead to the mounting of debts and which soon results in an unending debt spiral. The thing is, some credit cards charge high-interest rates, sometimes over 20%, and this can build up quickly and become troublesome.

Bottom Line

Credit cards are the best tools available to build credit. They can easy to get, free to use, and they report account information to the credit bureaus.

However, there is a catch;

The same thing can go negative in case if you misuse the credit card and don’t pay the credit card bills on time. This can get toxic to your credit report. So it is advisable to use the credit card responsibly.

Tirupati Gumpula

Hi, I'm a Tech Enthusiastic and founder of Popular technology blogsWay to Hunt. & Elite Tricks. Want to promote your brand? Email: [email protected]

Related Articles

Back to top button