Many people consider that credit card is a symbol of wealth and it can be a wonderful financial tool that offers great benefits for those who utilize it to their advantage. If you have strong self discipline to clear off your outstanding every month, holding a card makes a great financial sense to you. However, temptations to overspend and live beyond one’s earning ability are the main risks that cause the card holders to be burdened by deep debt.
Purchasing online and swiping the credit card during shopping are really easy tasks and you are definitely enjoying the moment. However, if you don’t have the ability to pay for the amount you swipe based on your current income, within a short period, you will find yourself drowning in debt. Not being able to pay back on time can lead to the damage of one’s creditworthiness and it is hard for obtaining other loans in the future. Although you won’t be sued for bankruptcy by the banks as credit card debt is an unsecured debt, it is hard for you to obtain any financial aid for other important purpose and the possibility to be blacklisted by the banks and financial institution is high.
Besides, you may also face the risk of identity theft. This happens when someone may obtain your credit card details and use them to make purchases online on your behalf. The purchases may be huge amount and you will be facing difficulty to prove that you never make the purchase. Normally in this type of situation, you will not be able to use your credit until the detailed investigations are done by the bank or credit card companies. Although the banks will not hold you responsible for such transactions, it is troublesome and time consuming for you to settle the case.
To sum up, there are some risks you need to bear when you are holding the credit card. It is important for you to handle the usage in a careful and responsible manner.