Should you get a credit card?

Credit card or debit card. What is the difference and why could they be confusing to newer generations?

A little background

All cards are issued by banks and some financial institutions. A debit card is basically your own money in one place, so whatever you’re spending is coming out of your pocket. A credit card is basically borrowed money which means that whatever you’re spending is not coming out of your pocket, yet! It’s a debt that you have to pay back. But, even when everyone tries their best to escape accumulating debt, they still go for a credit card. So, should you get one?

There are a few things to consider before getting a credit card. As with everything in the world, there are pros and cons to getting a credit card.

Pros:

1.      Building credit: It helps you build good credit in the long run which will be an advantage if you ever need a loan.

2.      Rewards: It comes with perks. Unlike a debit card, the more you use a credit card, the more benefits you’ll get. This varies from one bank to another, but it includes travel rewards and cashback.

needIt’s more secure than a debit card mainly because you’re not really taking your own money, but it’s borrowed money. So, if you ever lose it, the blow won’t be as hard.

Cons:

1.      Building debt: of course, the disadvantages still persist. The idea of having “free money” could lead to damaging and irresponsible behaviour; AKA accumulating debt. A bad look on everyone.

2.      High interest rates: Lack of debt repayment could even lead to paying debt and a not-so-little extra money on the side.

3.      So many fees: The banks are not gonna give you money out of the goodness of their metal unbreakable vault. They’re like financial gremlins and use fees as their weapon, such as annual fees, late payment fees, foreign transaction fees, and more.

So, before you decide on getting or not getting a credit card, weigh your options. Check where you at financially and if it’s gonna tip the scales your way or against you.