Credit card: these are the advantages and disadvantages

There are many possible uses for a credit card. In this article we explain the advantages and disadvantages of the payment method.

Credit card benefits

Credit cards are now available with almost every current account, depending on the bank and account management model, even free of charge. Numerous retail companies offer their customers a credit card as an extra service.

• With a credit card you can pay for your purchases and bills without cash. Countless shops worldwide accept credit cards as a form of payment. This also applies to service companies such as hotels, restaurants, petrol stations or car rental companies. You authorize payments by entering a PIN at the terminal or by signing. Contactless payment of small amounts of up to 50 euros is also receiving increasing support. All you have to do is hold the card in front of the reader.
• If you shop online or conclude contracts, you can also conveniently pay for them with a credit card.
• Many banks offer ATM withdrawals using credit cards, even free of charge and worldwide. It's worth comparing, especially if you travel abroad a lot.
• In contrast to a normal bank card, credit card payments are not immediately debited to the account. The sales are collected and usually collected from the account once a month. The bank grants you a short-term loan. The amount of the available limit depends on your regular income.
• Numerous companies, such as airlines, offer their credit cards together with a bonus system. With every payment you collect points that you can redeem for rewards.

Disadvantages of the plastic card

• The financial freedom of a credit card can quickly reverse if you don't keep an eye on your sales. If you buy generously and overdraw your account with the credit card statement, high interest will be charged.
• While domestic orders are usually free of charge, banks often charge fees for cashless payments abroad. Some institutes also charge annual fees for plastic cards. For precise information, you should take a look at the price list of the card-issuing bank.
• Credit cards attract fraudsters. Card data can be read out and misused via manipulated terminals or ATMs. Unfortunately, this is difficult to see. Do not take your eyes off your counterpart when they have given him your credit card.
• The same applies to online business. Credit card numbers can be stolen through malware on your computer or hacker attacks on online shops and trading platforms. Important: If you discover abuse, you must immediately block the card, report the damage to the bank and file a criminal complaint.
• When you use your credit card, you leave traces on the net. Conclusions about your shopping behavior and your interests can be drawn from this. This information can be used for advertising purposes, for example.

You can find the best credit card with our credit card comparison in the next post.