Credit card: advantages & disadvantages at a glance
Unlike at the beginning of the millennium, the credit card is now also a common means of payment in Germany. In online retailing in particular, credit card payments now account for a large proportion of all payment transactions. But does a credit card offer advantages that justify its widespread use? What are the arguments in favor of acquiring such a card? We give you a comprehensive overview of the advantages of credit cards!
The biggest credit card advantage: High acceptance
Probably the biggest of the advantages of a credit card is its high acceptance. Both online and in brick-and-mortar retail, credit cards are accepted almost across the board, at least in the Western world. Anyone who owns a credit card therefore hardly needs to worry anymore: Cash is not necessary and the EC card, which is usually rejected, especially abroad, can confidently remain in the wallet.
Moreover, credit cards can be used not only to pay, but also to withdraw cash. With many cards, cash withdrawal is even possible free of charge – sometimes even in foreign currencies and at ATMs of foreign financial institutions. A classic EC card does not offer these advantages.
Use abroad possible
As already mentioned, a major credit card advantage is that the card can also be used abroad. With the vast majority of credit cards, the use is possible regardless of the currency. This means that you can easily pay with a credit card in pounds, dollars or Złoty – without long conversion or exchange.
Access to certain services
Certain offers can only be used with a credit card. In particular, booking hotels or rental cars can hardly be done without a credit card today. Consequently, a great credit card advantage is to get access to these services.
Collective billing at the end of the month
The last major advantage of a credit card is the collected billing at the end of the month. Unlike debit cards or payment service providers like PayPal, you are not billed immediately after using the card. This may give you a better overview of your finances. Furthermore, you are always granted a small credit without any effort. This can be advantageous if you need to buy something at the beginning of the month, but only receive money at the end of the month.
Disadvantages of a credit card
However, it would be rash to conclude that a credit card only offers advantages. In fact, the aforementioned advantages of credit cards are also offset by some disadvantages. In particular, the financial freedom that a credit card grants can also be understood as a major disadvantage. Since your bank grants you credit within a certain limit and only settles your account at the end of the month, it is quite possible that you spend more money than you have. In this case, relatively high interest is usually due. Those who use a credit card are therefore more likely to run into debt.
In addition, there is often a lack of clarity about the costs when using credit cards. Sometimes it is unclear what fees are incurred for use in foreign currencies or for overdrawing the credit line. Here you should inform yourself well before deciding for or against a credit card. The fees vary from bank to bank, sometimes considerably.
A prepaid credit card is an alternative to the classic credit card. It offers almost all the advantages of a credit card without an increased risk of debt. Here you can only dispose of the amount that you have previously transferred to the card. Such a prepaid credit card is offered by n26*, for example. Most branch banks also offer such cards today.
Gehört zum Inventar