Credit Cards – Pros and Cons

Credit cards are controversial. Some people love them, and others despise them. They can be great for you or a very detrimental to your finances.

In our home we use credit cards, but we use them wisely and with caution. Here are some of the Pros and Cons of credit cards.

credit cards


1. If used correctly, credit cards can have a positive effect on your credit score. Now, don’t go crazy opening new credit card accounts {that would be bad for your credit score}. Keep one or two cards and pay them off every month.

2. Keep track of your expenditures. You can see everywhere your money is going and how much of it too. If you are using this method for your monthly budget, you can keep track a little easier of where your money is being spent.

3. Rewards Points. These are my very favorite part about credit cards. Every year around November, I cash in my bonus points for gift cards to stores where I know I can get a lot of things for little money. I buy Christmas presents with these gift cards, people. Christmas presents. With FREE MONEY. I love it!


1. Overusing a credit card can lead to very bad credit scores. If you don’t know how to manage your money and end up spending more on your card than you can repay, you’re going to damage your credit score. Bad credit score = banks don’t want to lend you money = harder time purchasing a car or home. Don’t do it to yourself.

2. Debt. We all know that people get happy when they get their first credit card and start buying everything in sight, because it’s almost like magic when paying with a card. Invisible money. Except it’s not. When I got my first credit card, my mother always told me to make sure that whatever I bought, I had the cash to pay for it in the bank. I still do this to this day. Don’t overspend. Don’t buy things because you want them. Buy what you NEED. If you go with this method you won’t go into debt that you cannot repay.

3. High APR percentages. Credit cards are notorious for high APR percentages. That’s how they make their money. They’re banking on you not paying off your bill on time. I’m no expert at finances, but I do know that paying 18% extra is no bueno. Here’s the secret though. If you keep your amounts low and pay them off every month, you never even see those APR’s. If you happen to be taking a vacation or buying a large purchase (ie new TV or bedroom furniture), and you don’t have enough money to pay if off at once – figure out what you CAN pay every month to get it all cleared off your card in 2-3 months. I don’t suggest this, but if it’s your only option, try not to carry a balance for more than 2 cycles.

4. Some credit cards charge monthly or yearly service fees. Stay away from those unless you have a bunch of extra money to spend every year. I once had a card that was free for the first year and they never told me that there was a yearly fee afterward. Don’t let that happen to you. Ask questions. Be informed.

There you have it. My pros and cons to credit cards. I hope this was helpful to you and not too confusing. As always, if you have any questions, please feel free to email me at or leave a comment below!

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