Disadvantages of Credit Cards

In our earlier post, we have learned about credit card and its benefits. Like every coin has two sides, credit card also has disadvantages on the other side. 

1. High Interest Borrowing :

Credit card provide zero interest advance only if you pay its dues in full on time. If there is any delay, Credit Card companies will charge you heavy interest on outstanding balance. It may be between 24% to 48% per annum.

2. Late payment penalty :

Along with heavy interest, Credit Card companies also charge late payment fees or penalties along with interest.

3. Annual Maintenance Charges :

Many Credit has Annual Maintenance Charges. You may get waiver of this charges when you use your card upto specified limit.

4. Promote habit of spending :

If you always buy things on credit card, there may be chance of over spending. This is happen when we do not maintain discipline while using it. Various offers on cards also encourage us to spend more. 

5. Fraud :

Like Debit Card and UPI fraud, you may get trapped in to credit card fraud. 

6. Restrictions and Charges on Cash withdrawals :

There is lower limit of cash withdrawals. Charges and interest is also applicable on such withdrawal even if you pay your due on time.

This are few disadvantages of having credit cards.