Do I Need a Credit Card?

Having credit cards makes life much easier; the differences between Visa, MasterCard and an American Express card are significant, but having any one of them will make life easier. It is not impossible to go through life without owning a credit card; however, it will make many things less complicated.

Credit Cards

Credit Cards

To book hotel rooms, rental cars and many other things you may need or want, a credit card is a requirement. Yes, while you can use your debit card to pay for these things, the establishment where you are will place a hold on your bank account for a specific amount. The biggest pro of having credit cards is the ability to book hotels and rental cars and other travel and entertainment items without having a hold placed on your bank account for as long as 30 days; during that 30 days your funds cannot be used. Credit cards do not allow this to happen and therefore your funds are free for use.

The cons of having credit cards are pretty obvious; the risk of debt is a big one. For those who are not responsible with their spending habits, having a credit card could mean they will end up in debt. Many people view credit cards as free money, even though they are not. Purchases made with a credit card that are not paid off in full each month accumulate interest and end up costing much more in the long run.

When it comes to choosing the type of credit card to use, there are several options. Some of the most commonly used cards are Visa, MasterCard and American Express. Visa and MasterCard are not companies that issue credit cards; rather they are companies that work as intermediaries between financial institutions that offer credit cards and you. These financial institutions pay to have the credit card logo on it so that the card will be accepted worldwide. American Express issues its own card and works with no one else. Additionally, AmEx typically costs more to have in the way of annual fees; some AmEx cards must be paid off in full each month while others allow for a revolving balance.