Every activity involves some risks, however, some attract a greater risk than others. It is more risky to carry cash worth $100 in the pocket than it is to carry a credit card. One can be robbed and the whole amount taken. On the other hand, it is also risky to purchase with a credit card because the waitress can steal your number although in some cases one can be able to redeem the money if a case of fraud is proved. For instance, if one notices cases of fraudulent charges, he can notify the credit card company which will be able to work on the same and the credit card holder will only pay for the undisputed charges (Shead, 2009). Checks and debit cards contain a lot of personal information as opposed to credit cards which give very minimal information thereby reducing the case of fraud. With A credit card, one can track down all the purchases made in a particular month and this can act as a basis for preparing a budget for the proceeding month.
On the other hand, there are so many disadvantages associated with the use of credit cards; they encourage impulse buying and increased spending which in turn increases the amount of debt incurred and can even result in bankruptcy (Shead, 2009). Statistics taken in 2009 reviewed that, more than 507 million credit cards were in circulation in America. People start using credit cards as early as 20 years and an individual can own up to 3 different credit cards. Some of these cards are used to buy many goods that are not necessarily important and ignore the basic things such as food and clothing. Others like impulse buying and will buy anything that attracts them so long as they are not removing any cash from their pockets. They end up paying high charges in terms of fees and interest rates for the credit cards which they would have been avoided if they did not have the credit card (Woolsey & Schulz, 2010).
Statistics taken in 2004 reviews that, more than 84% African-American and 54% white-American carried credit card debt. With credit cards, Americans tend to eat a lot only to be surprised at the end of the month when they are asked to pay huge bills for the expenses (Woolsey & Schulz, 2010). Currently the world is going through a recession period, there is need to cut down on expenses and the only feasible way to do this is to reduce the reliance on credit cards. It is important to differentiate a want from a need when making decisions on what to purchase. Wants are the things that we can not do without such as food and shelter while needs are things that we desire just to make life more comfortable. Americans should learn to differentiate the two terms so that they are more cautious on what they buy and this can only be achieved if they are discouraged from using credit cards.
Shead, M. (2009). 4 Reasons you should use a credit card. Web.
Woolsey, B. & Schulz, M. (2010). Credit card statistics, industry facts, debt statistics. Web.