Disadvantages of having a credit card.

By admin
15 November 2013

1 As good as it all seems, the major disadvantage of a credit card is that if you do not pay the full outstanding amount within the 55-day interest-free period, you will be charged a high interest rate. Withdrawing cash and buying petrol are expensive on a credit card, because you will pay interest from the day of the transaction.

2 Credit lenders will give you a credit card, but in many instances they do not look at your total affordability, and sometimes allow you more credit than they should. Monthly repayments can become costly, and this means that you will be in a vicious circle of debt.

3 All credit cards charge annual card fees, and these are expensive – between R120 and R400 per year.

4 If you do not use your credit card sensibly, such as paying the right monthly instalment and paying on time, you can be charged expensive over-limit and late-payment fees of up to R150.