Is using a credit card in a fixed income good or bad?

The credit card is the savior during the month end exigencies for someone who gets a fixed income every month. It can be used for emergencies and helps to build credit history down the line. One should be careful to pay the amount in full every month as it carries a huge rate of interest if unpaid.

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Many people say Credit card can be detrimental to your finances as you will be succumbed to temptation and fall into the trap of unending debt. As every coin has two sides, even credit card has both benefits and problems. If used wisely for emergencies, a Credit Card will be our best friend who will help in our needs.  Most importantly it is safer and convenient to carry a credit card rather than handling the cash.

If you use a credit card as a short-term loan which has to be paid off immediately, it works wonders for you. Here, I listed out some of the benefits of using a credit card:

  • Helps in building the credit history. We need a credit history to secure house loans, vehicle loans, and many other transactions.
  • A Credit card provides an emergency source of funds, and at much lesser interest rates than a payday loan.
  • Many companies offer reward points on credit cards. You can buy something on simple EMIs using credit cards. Many times it is beneficial to do your online, offline shopping on a Credit card rather than shelling down the cash.

I conclude that credit card is good for a person who gets a fixed income if used wisely.

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