Lending Club Blog

The Pros and Cons of Credit Cards

credit card soda

Making a purchase with a credit card can be exhilarating and rewarding one moment and regrettable and binding the next. For many, the joy of that tiny square of plastic monetary freedom becomes a ball-and-chain of debt faster than you can say “discount sale at Sears.” Yet others maintain a responsible, reliable account that provides a rewarding experience.

To own or not to own—that is the credit card question. While credit card debt plagues millions of Americans, just as many thrive on the flexibility and ease of paying with credit. Obviously, the magic of the little plastic card is not right for everyone. Take a look at the following pros and cons for credit cards to decide whether or not you should make the swipe.

Credit Card Pros


Credit cards wouldn’t be nearly as popular as they are today if they weren’t so maddeningly convenient. Paying at the store, at the pump, or at the ballgame is significantly easier with a piece of plastic that takes no immediate bite out of one’s pocketbook.

The fact that most major stores (and most minor ones) accept Visa, MasterCard, and Co. only adds to the handiness of carrying around a credit card. Lunch tabs and Lamborghini rentals could both be taken care of by a simple swipe. You name it, and a credit card can purchase it.

Peer pressure.

Everyone has one. That reason was good enough to spark digi-pets, and it is good enough for credit card applications, too. Watching your friends pay for meals with their American Expresses makes you feel pretty worthless when you break out your US Bank debit card to foot the bill for your soup and salad special.

Owning your very own piece of plastic provides a sense of belonging, serving as a platinum membership card into the world of commerce and retail. For college kids, owning one is a step towards adulthood. For adults, having one makes you feel like a true American. Either way, the pressure to fit in has a big say in whether or not you make the plunge.


One of the greatest parts to credit cards (other than the personalized pictures; hello spring break ’06!) is reaping the rewards for your spending habits. You worked long and hard to find the last copy of Pirates of the Caribbean in that Circuit City bargain bin, and you deserve every purchase point you get from paying on credit.

Depending on your card, the rewards can vary, but the good news is that there is such a wide variety of options that you are bound to be able to find the right card to fit your lifestyle. There are cards that offer plane tickets, sports merchandise, and good old-fashioned cash. Others build up a stockpile of points for cardholders to use to get whatever their hearts desire. Ironically, points may be used to achieve Pirates of the Caribbean DVDs.

Building credit.

Spending has its benefits (new jeans, perhaps), but spending with credit has benefits that go beyond mere denim. Using a credit card—and using it responsibly—can help build one’s credit score, which could mean a better shot at a loan or a better mortgage down the road.

The key part to using a credit card to build credit is keeping up with payments. Having a credit card does no good if you fall behind on payments or rack up an unconscionable amount of debt. Acting responsibly on your account, however, will help you build a credit score that reflects dependability and accountability.

Credit Card Cons

Late payments.

By far, the most dangerous part of credit cards is not paying them off on time, and for many, this problem is a constant temptation despite its obvious negative consequences.

Once you fall behind by one payment, the climb back to a debt-free account becomes harder and harder. Late fees, interest, and penalties build faster than you would believe, and you may find yourself making monthly payments that only cover your charges and don’t even touch your principal purchases.


Often as a result of late payments, many people find themselves sunk in credit card debt with no way out. Credit card companies are great at getting customers in the door, but once you fall behind with payments, the companies make it nearly impossible for you to climb your way out. Between fees and charges and piling interest, the matter seems to continually get worse, not better.

If you cannot keep up with credit card payments, then owning a credit card is probably not for you. The disadvantages to not paying on time are innumerable, and the odds of staying debt-free are not in your favor.

Hidden fees.

Many times, credit card companies will say or do whatever it takes to get you to sign your name on their application. Of course, once that ink has dried, they’ll suddenly remember to tell you about start-up fees and processing fees that you never saw coming.

Annual fees are a big one, too. That credit card that earns you frequent flyer miles every time you buy might seem like a good idea, but for $100 a year, the right to own it may be too much.

Always check the fine print of a contract before you sign and ask if there are any extra fees. The free t-shirt just for signing up might be nice (and long-sleeved!), but the $50 paperwork fee isn’t.


One of the most overlooked negative aspects to credit cards is the ease with which cardholders overspend. Really, the psychology behind this is simple. You purchase items without ever exchanging actual money, so you hardly feel like you’re paying anything at all.

But the joke is on you. Not only do you have to pay for everything at the end of the month, you may end up paying for far more than you ever intended. Without fail, people look at their month-end statements and are blown away at how much the charges totaled, yet when they are out there making their purchases, they think nothing of it.

If you have trouble staying focused on necessities when you’re out shopping, a credit card might mean the difference between purchasing the Gucci bag you don’t need or leaving it on the shelf.

Photo by Mene Tekel.

Tuesday, June 3rd, 2008 at 12:41 pm

Comments (6)

  1. Miss Thomas:

    The best advice that was given to me was don’t make purchases that
    can’t pay off without using a credit card. if make a purchase and
    pay it off, wonderful, but if you make minimum payments that don’t
    look to great and they tact on fees and interest.

    June 23rd, 2008 at 11:52 am

  2. Mya Jordan:

    Absolutely, I do agree that if you do not have the funds to make
    these purchases without a credit card then you really should not be
    making any purchases all together. If you have the funds to pay the
    bill off right away then your in “good standing” but if you are the
    person who makes minimum monthly payments than you need to evaluate
    the choices you make when making purchases. Hope This Helps, Mya J.

    June 23rd, 2008 at 11:58 am

  3. Rony:

    this is correct. if you can not afford it don’t buy it.

    July 29th, 2008 at 9:32 pm

  4. diamond:

    I do agree with everything that was said from Mya J. So keep doing
    the good job.

    September 4th, 2008 at 5:32 am

  5. Harriett:

    Hi, I accidentally stumbled upon your site whilst I’m searching
    around the Internet as I’m researching some info on debt relief!.
    Very interesting site

    November 28th, 2009 at 6:28 am

  6. Ronnie Barrios:

    peer pressure is a con! okay that will be all.

    November 19th, 2010 at 6:07 am


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