Credit card is a form of plastic money issued by banks to the account holders, if they are found eligible to get one. Unlike debit cards, a credit card allows you to spend money in advance or without deducting the amount from your bank account at  the same time. So what is a credit card? Basically, it provides you a short term (one month) credit in the form of your total spending as per the pre-set limit. It is a rectangular plastic card that a lender like a bank issues and it lets the card-holder buy products and services on credit. A credit card is not issued to every account holder or customer of a bank. They are offered to customers with good credit score or decent income as per records with bank. 

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However, in case you do not repay the outstanding bill at the end of the month, a bank is entitled to slap a penalty on you and even charge you an interest on the principal. Banks charge comparatively higher interest rates in case of late or no payments, which generates a tidy profit.  

Commercial banks offer a lot of discounts, cashback offers and freebies for shopping via credit cards to lure customers. These offer tangible benefits and have become a great source of revenue generation. The trend is so strong that nowadays, swiping a credit card for any kind of shopping has become virtually a habit for millions of people. Here we list 3 pros and cons of using a credit card.

Pros of using a credit card:

1. Easy and convenient:

As it is plastic money, it is definitely an easy thing to carry and spend through instead of cash. There is no fear of money being stolen as it is secured with a PIN. In the age of cashless transactions, it is a must have thing for sure. Also you can shop through online e-commerce platforms with ease and comfort.

2. Use it even if you don't have cash in bank and wallet:

As it provides you a window of one month to repay the credit limit or spent amount, you can use it even you are with no money. Sometimes, you don't have enough cash or enough balance in bank account, the credit card can still help you out to spend money. 

3. Offers and discounts:

There are lots of offers that are given by both vendors and banks. As it promotes quick and easy shopping, vendors provide attractive offers to increase their sales. In case of banks, the more you spend, the better it is for them in every way.

Cons of using a credit card:

1. High interest rates and penalties in case of late payments:

The banks charge a very interest rates and penalties in case of non or late payments. The charges however, can differ from bank to bank, but they are generally higher than nominal interest rates.

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2. Turns you into a shopaholic:

As you get a window of one month and advance credit, you tend to spend more than your requirements dictate. It makes you a shopaholic and you can end up buying unwanted stuff, adding pressure on your budget. 

3. Prevents you from saving more:

Saving is essential for a healthy future, it leads to better life when you cannot work anymore. But if you are spending unnecessarily on irrelevant stuff, it prevent you from saving more in life.