Pros & Cons of Credit Cards

For many of us, credit cards feel like an important step in becoming a financially independent adult — especially for young adults coming of age.

And there’s no shortage of options for those who want or need to borrow funds, whether it’s for a specific purpose, vacation, or to help supplement income.

“Credit cards have become incredibly popular over the last decade for a number of reasons, but they also are a great tool if used correctly,” said Sue Commanda, CEO of Hudson River Community Credit Union.

Credit cards gained popularity because of some of the key advantages offered by the companies that issue them.

But they can also pose challenges and consequences when not used properly.

According to the 2019 Experian Consumer Credit Review, Americans have averaged $6,194 in credit card debt.

The report shows the average credit card debt in New York is $6,491, which is not as high as other states, like Alaska, which averages $8,026 in debt per person. Iowa, on the other hand, had the lowest average credit card balance with $4,774.

Depending on your income, this amount of debt could be staggering.

If you’ve ever asked yourself “Why should I get a credit card?”, you should take the time to weigh the pros and cons before making a decision.

Advantages of Credit Cards

Build Credit

Credit history is a personal record of borrowing money and then the amount of time taken to pay it back.

After you open a credit card, or any line of credit, the lender reports the activity to a credit reporting agency. Other activity reported includes missed payments or a history of late payments.

This credit history is what determines your credit score. Your credit score is what lenders use to decide if you are a good candidate for any type of loan — including a mortgage or car loan.

So, if you make regular, timely payments to your credit card lender, you will ultimately build good credit.

However, there is a limit to how many credit cards you should open. Having too many could make your credit history look questionable to a lender.

It’s best to do your research and then open a small number of credit cards that will benefit you.


Relying on credit cards could be more secure than cash, especially if someone gets ahold of the physical credit card or information.

In the unfortunate situation that your credit card is lost or stolen, the credit card company will be able to assist in freezing the account to avoid fraudulent charges.

It goes without saying that if you lose your wallet, it is unlikely for any money in it to be recovered.

Disadvantages of Credit Cards

Cost of Borrowing

Credit cards can be convenient, especially with high-ticket items.

But it comes with a price.

Take the annual percentage rate (APR) into consideration — it can be quite high depending on the lender. Credit cards might also come with service fees and penalties for late payments.

Using a credit card for purchases could ultimately mean paying back more than you spent. It could also add to your debt unless you are able to pay the amount each month.

Doing research is always important to avoid falling for something flashy. Instead of falling for a celebrity spokesperson, look for a credit card with a competitive APR or even cashback rewards.


It’s almost inevitable for adults to have some amount of debt at one point or another during their life.

Whether it is medical bills or car repairs, it’s bound to happen.

During these situations, having a credit card on hand can be helpful and might relieve some stress.

But it can be quite easy to find yourself in a hole if you do not limit spending or practice discipline.

Shopping sprees and concert tickets always sound like a great idea, but not when the amount adds up to something you can’t comfortably afford to pay back.

Avoid digging yourself into a hole and set a budget or limit the amount of unnecessary purchases charged to your credit card.

Our parents might have taught us that credit cards are only for emergency situations. But if you budget your spending, and weigh the pros and cons of credit cards, they can be beneficial.

If you lose track of your spending or forget to make a payment, it could hurt your financial situation.

Get a Credit Card or Learn More

If you think a credit card can help you further improve your financial situation and stability, learn more about credit cards and find out what the best option is for you.

You can also learn more about the credit card options available through Hudson River Community Credit Union and ways to help your finances by contacting our experts today.