At present time, applying for and obtaining a credit card is becoming straightforward. However, not paying debts on time will lead individuals with financial issues. This essay believes that although these provide financial flexibility to individuals, the disadvantages outweigh the advantages as they charges high interest rates and a individual will become more spendthrift with the use of credit cards.
Credit cards are one of the flexible modes of payment as it enables a person to buy or purchase whatever they want and whenever they want even if they do not hover cash with them and can spend upto a limit without worrying about money and have to pay back this amount before due date. For instance, the balance sheet of State Bank of IndiA has shown that 70 % people are using credit card for their purchases.
The usage of credit cards has lead with many disadvantages as they charges high rate of interest as compared to other loans. A person have to pay for service fees, annual interest rates and also penalties for late deposits. So this money will be considered as waste or is of no use. Furthermore, am individual is tend to become spendthrift if they are using credit cards they are more likely to make unnecessary purchases which may lead to damage of their finances. For example, A report has shown that a person made payment using credit card have to pay EMI instalments and sometimes regret later.
To conclude, this essay restates that even though usage of credit cards provides financial flexibility to individual, the demerits outweigh the merits as a person have to pay high interest rate and also tend to become spendthrift by using credit cards.