Is it worth using a bank card: advantages and disadvantages of cashless payments

Credit cards are an important financial tool for many people who like to manage their expenses conveniently. UAportal tells you about their advantages and disadvantages so that you can make an informed decision whether to use them.

Advantages of credit cards

• Convenience

With a credit card, you can make purchases online or in a store. This saves you from having to carry large amounts of money or search for ATMs. Plus, credit cards often come with contactless payment options, making transactions quick and easy.

• Rewards and perks

Many credit cards offer rewards programmes that allow you to earn points and cashback. These points can sometimes be redeemed for various benefits, such as discounts, gift cards or even free flights. In addition, some credit cards offer additional benefits such as travel insurance, extended warranties, and access to exclusive events or airport lounges.

• Building a credit history

By making timely payments and maintaining low credit utilisation, you demonstrate to lenders that you are a reliable borrower. This can be helpful when applying for a loan, mortgage, or even a future credit card, as a good credit score can increase your chances of approval and secure better interest rates.

Disadvantages of credit cards

• High interest rates

One of the biggest disadvantages of credit cards is the high interest rates charged on unpaid balances. If you actively use your card, the interest can accumulate quickly, leading to a large debt over time. It is very important to pay off your credit card balance in full every month to avoid this and to avoid falling into a debt trap.

• The temptation to overspend

The availability of credit can create a false sense of financial accessibility, which can lead to impulsive purchases and debt accumulation. It's important to exercise self-discipline and spend only the amount you can afford to repay in full each month to avoid falling into a vicious cycle.

• Fees and penalties

Credit cards often come with various fees and penalties that can add to the overall cost. These can include annual fees, late payment fees, cash advance fees, and foreign transaction fees. It is very important to read the terms and conditions of the credit card agreement carefully to understand the essence of the fees and avoid unnecessary expenses.

Earlier, UaPortal shared why not all Ukrainians will receive a pension supplement after the age of 70.

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