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  • Credit cards have replaced cash and checks for many people as the preferred payment method. While the convenience of credit cards are a plus, there are some disadvantages to their use.

    Convenience

    Credit cards are beneficial because you can carry one piece of plastic rather than having to carry cash or checks. With one swipe of a card, your bill is paid in full rather than having to count out exact change.

    Security

    If you lose your credit card, you can call the company to cancel the card and prevent any loss of money. If you are carrying cash, it is unlikely that you will be able to recover the lost funds.

    Rewards

    Many credit card companies offer cash back, miles or other rewards programs for people who use their cards. The more you spend, the more rewards you earn.

    Lack of Accountability

    When you spend cash, the amount you have in your wallet decreases, limiting the amount you can buy. With a credit card limit of several thousand dollars or more, it is harder to track your spending.

    Interest Rates and Fees

    If you do not pay off your balance in full and on time every month, credit card companies will charge high interest rates and finance charges, adding to the cost of your purchases.

    Source:

    Bankrate: Credit Card Basics

    Credit Card Cool: Advantages and Disadvantages of Credit Cards

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