ARE CREDIT CARDS BAD? In-depth analysis of a financial friend or foe

By Uday Tank posted 15 days ago

  • Quick Fact: There are many Brits who love credit cards and those who hate them. Either way, folks on both sides of the credit card fence have a pretty good stand on the subject.


In the world of personal finance, one of the most hotly contested subjects is, without an iota of doubt, that of ' credit cards.' While many think the cards are nothing but a harbinger of debt, many people love and enjoy them. I know you are probably asking the same question too. 

Are credit cards bad? Well, from a technical standpoint, the outright answer will always be: No, credit cards aren't bad. However, while many personal finance gurus might have you believe that the first step to becoming financially stable is credit card avoidance; I beg to differ. From a rather open-minded viewpoint, it isn't so much about the cards, but our behaviours with the card. Fine, we understand and respect others' opinion; credit cards are ABSOLUTELY a bad idea and can lead you to wonder how to stop a bailiff, but that's only if you are still struggling to keep up with some basic life issues, like overspending or you have some debt you are settling.

If you find yourself in this position, then, of course, credit cards are bad, and you need to stick with the basics, by either cutting out credit cards or seeking a trust deed advice like the gurus suggest. If otherwise, credit cards can be perfect for you!

While we've established our standpoint, we will leave you to decide whether or not credit cards are bad for you. But before that, we will love to enlighten you about the pros and cons of credit cards, so you can exert an unbiased position on the subject. Enjoy as we move on to the next frame.


The Pros and Cons of Credit Cards

Before you join in on the thread about how credit cards are bad, be sure to check out these Pros and Cons first.



Build Credit: You remember those pretty big homes you’ve always dreamt of buying? Well, credit cards can help you achieve that dream; ask me how. When credit cards are used responsibly, the effect lives on for long on the credibility and trustworthiness of the users. Most lenders will always want to know how you’ve fared with credits historically – by checking your credibility – before granting you funds in the forms of auto loans, credit loans, or mortgage. So basically, to enjoy some of life’s basic offers, one has to build credit, and the best way to do that is through credit cards. 

Earn some rewards: With credit cards, one could score some pretty good points and earn some amazing rewards all for spending money the same way you normally do. To entice new customers, and encourage existing users, most credit card companies offer a wide range of rewards, including sign-up bonuses and cashback rewards. 

Safe and easy 

Who goes about with a wad of cash anymore these days? Credit cards are basically more convenient than cash, and they make transactions easier as they are generally accepted in most outlets, stores, and can even be used to settle transactions like a pre paid funeral plan. They are a great consumer spending tool, ready to go anytime. But that isn’t the only thing that makes credit cards a much better option than cash. When you lose a credit card, your issuer can simply send you a new card, but that is never the case with cash; is it?

Extended range of transactions: Perhaps this is one of the greatest benefits of technology. In this digital age, one could complete a transaction as fast as a 2-year old will spell the word “2-year old.” Such is the convenience with which people now live. With credit cards, people can now complete a wide range of transactions rather than the conventional in-person transactions people were limited to with cash. 



Potential to overspend: As we’ve mentioned earlier, credit cards are bad for you if you are still finding it hard to live by a code – budget. While many people see and enjoy the benefits of credit cards, several others struggle to keep up because of their inability to avoid the temptation of overspending. 

Can lead to debt

To some people, credit cards can seem like an endless pool of money, something to tap into every time they see the next pretty thing on the internet. Well, FYI, credit cards are not designed for such. If you don’t treat and use them responsibly, they will lead you into serious debt. For instance, maybe you’ve gone online to conduct a simple funeral price comparison, but while you were surfing the internet you stumbled on a pretty looking shoe ad, and you just couldn't help but drop your credit card details to purchase it. Well, behaviours like these will only lead you into debt.

Credit scores

When you use your cards irresponsibly, and you default on your payments, it will affect your credit score negatively, which can affect your chances of being approved for things like auto loans, mortgages, and personal loans, or at the very least, reduce your chances of getting the best rates.