Since their invention in the mid-20th century the credit cards have revolutionized the payment process. They are said to have a fair amount of benefits such as:
They are more easier to carry than cash
They enable safe online shopping
They help one to build a good credit history
There are some more plus points which any credit card user can vouch for. However, the picture is not as rosy as it seems to be. Credit cards usage has its own share of shortcomings and disadvantages. I have listed some of them here:
Getting trapped in a debt spiral
Credit scores may drop
They have complicated terms and conditions
In order to be on the safe side one needs to use credit cards prudently. If the user is experienced in budgeting and managing finances, it is fine. Otherwise what happens in most cases is that people tend to overspend. This is hardly surprising because we are living in a consumerist society where our choice is influenced by advertising rather than our needs. The commonly used terms and phrases these days, which hint at compulsive shopping are shopping spree, shopaholics, shop till you drop, binge shopping, retail therapy just to name a few. Instead of believing in the principle of ‘living within one’s means.’ people have actually started ‘living beyond their means’. People have started giving in to the urge to splurge instead of resisting it. Little do they realize that their uncontrollable urge to spend unnecessarily can be the consequence of stress, unhappiness, boredom or anxiety, according to a shopping addiction expert.
So with the increased purchasing power that they provide, the credit cards are actually akin to a double-edged sword which can leave the people high and dry.
Keep Me In Your Prayers.