What Are The Disadvantages Of Credit Cards?

What Are The Disadvantages Of Credit Cards

Using credit cards as a mode of payment is very convenient to many people. You do not have to worry about carrying your money physically and can almost use it anywhere to pay for your shopping, restaurant bills etc.

This is basically an instant loan issued by the bank for the cardholders according to his/her credit limit. The cardholders must return the money to the bank in a given period of time to avoid any conflicts. Anyway, do you have any idea on what are the disadvantages of credit cards?

Extra charges, overspend tendency, too much debt, poor credit score, etc. are the major disadvantages of credit cards. In order to apply for a credit card and use it as a payment method, it is important to know all the disadvantages in detail of having a credit card.

In my article I’m going to discuss in details about the disadvantages and the drawbacks of a credit card:

4 Major Disadvantages Of Credit Card:

Here are the main 4 disadvantages of credit card with proper explanation:

1. Additional Fees And Hidden Charges:

The first thing that you should know before using a credit card is an additional fee and interest that needs to be paid along with the money you have used or borrowed. Along with the interest rates, there are many hidden charges of using a credit card. The interest rate and extra fees may vary from issuers to issuers, but it is inevitable that you have to pay additional fees sooner or later.

If you spend more than your credit limit, an additional balance or fee will be added along with the total amount. Some of the issuers also charge a monthly fee based on the use of your credit card.

There is also a fixed annual charge, which needs to be paid as a security money for using credit cards. Before applying for a credit card, make sure to check the annual percentage rate of your chosen bank or the issuer.

For instance, if you miss the date of repaying your debt to the issuer or bank, an extra charge will be added for delayed payments. For any kind of balance transfer both locally or into foreign countries, the issuer will charge you an extra fee for the whole procedure. 

Always make sure to pay your credit amount or borrowed money before the due date to avoid these additional charges. Even if you cannot pay the full amount, at least pay a minimum amount to keep your account running and safe.

2. Growing Tendency To Overspend:

According to a report, it is said that most people owning a credit card have the tendency to spend more than they need. It can become a very serious issue, if you do not control your spending spree using the credit card. Before making a credit purchase, always analyze the product you are buying. You have to understand the value of the product, whether it is credit worthy or not.

Most people abuse the power of credit cards and end up spending on unnecessary items  without even realizing it. You can grow a very unhealthy habit of buying things beyond your ability which will result in excessive charges and fees which you cannot even pay later. 

It is important to understand the right usage of credit cards. Set your mindset in a way where you will not be tempted to use the cards without any actual or legitimate reason to avoid such habits.

3. Find Yourself In Serious Debt:

As you already know by now, additional fees are charged on a monthly basis depending on your expenditures. You have to pay the debt in a given period of time to prevent yourself from falling into serious debts. This is a very common phenomena amongst the people spending more than they need using their credit cards. 

If you cannot pay your borrowed money or debts on the specific time, your interest rate will go higher which you really do not want to pay. Once you find yourself in serious debt, it is very difficult to come out from your debt and you will lose your credit score.

If you are smart, always make a budget before using your credit card. Check the limit of your card from time to time to avoid and prevent yourself from unnecessary debt from the issuer. It is also important to communicate with your family members and educate them about the right usage of credit cards. 

4. Poor Credit Score Will Ruin Your Reputation:

Paying off your debts on time will be counted as a good credit score. On the other hand, being unable to pay the due debts on time will add a poor credit score to your account. This is something you do not want to afford as, poor credit score will ruin your reputation and can impose restrictions on you from getting accepted for future credit card and other fringe benefits.

Poor credit score will also limit you from getting bank or personal loans. You have to maintain certain behaviour and restrict the misuses of credit cards like overspending and not paying your dues on time to avoid such circumstances. 

However, if you intelligently sustain and maintain few necessary practices such situations can be dealt with. Keep a routine check on your accounts to see if you can pay the debts on time.

A minimum monthly fee is needed to be paid and make sure you are giving the fee for a good credit score. Enabling an auto payment method for your credit cards minimum charge can add good credit scores


There are many advantages and disadvantages of using credit cards. It all depends on you to find the right way and avoid unnecessary trouble. Always keep an eye on your transactions and calculate the amount of money that was spent using your credit card.

Credit card payment is a very smart choice but if you cannot plan your spendings and maintain proper use of the card, this will be a huge burden for you. So, be careful.

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