Are Credit cards wise?

[bakasabo]

Depends on the country you are resident of, your wealth, your plans. If you want to build trust with bank - use credit cards, even though you have enough funds. Some use cards to divide financial load on a person. There are people who use credit cards only to get bonuses (for example people get exclusive discounts, I used to receive movie tickets each quarter for having a card). Sure enough there are people who want to have more than they can allow, and they become infinite debtors.

I won't say it's fully dependent on the country the person is residing, the country has little to no effect on the persons decision on how yo use his or her credit card. Well from your post it tells that you're not one of those people who thinks credit cards are banks gift to give them overall comfort with little interest. The moment folks begin to think like this it's positive they might end up borrowing more than they can pay before the elapsed due date. Any offer coming from a bank I'm very cautious in examining them before I accept ot reject because no matter how beneficial it may be to you, banks would always benefit more most especially when you fail to meet their terms.

Lets take USA as an example. Person who is using credit cards is building his credit history and for the bank he is more welcomed customers who will get better offers than a person who use only debit cards. So country has an effect.

Now bank service. In my country bank offer cashbacks only for payments made by credit card. Do simple math. You get back +1-15% (15% on selected categories of expenses) from every payment you make, but you pay only 12-16% annually for using credit cards balance. Plus you get travel insurance for free, loyalty program bonuses. I think when you use credit card, you mentally spend less. It protects from unnecessary expenses (but not for everyone I must add, that wont stop shopaholics). Because you mentally add % for card usage to price and reject purchase.

[Adiljutt156]

The question is being asked whether it is wise to use a credit card or not. If you pay your bills on time and do not make unnecessary expenses, then a credit card proves beneficial, but if you do not pay the loan on time, then interest and fees may be charged. If you pay your bills on time, then your credit history can improve. A credit card is a means through which you can make purchases by taking money from the bank and returning the money later. It also has this advantage. If a person controls his expenses and uses the card only when necessary, then a credit card can prove to be useful, and for a person who spends wastefully and takes unnecessary loans, it can cause problems and debt.

Sometimes discipline users can miscalculate their income and they can over spend also. Credit cards are normally used for fraud protection ,shorter cash flow management , they are basically financial tool that we are using not just for emergency. Financial literacy is very important someone can be very carefull but still they fallall into the debt circle if the circumstances changes or there is inflation or unexpected expenses or job loss. Credit cards are not bad inherently but also they are not harmless as just self control. Instead of saying it wise or unwise, it is more accurate to say that the credit cards are working as a neutral tool powerful when manage properly and risky when misunderstood or misused.