REFRAINING FROM LOANS VS. USING CREDIT CARDS 2
Refraining from Loans vs. Using Credit Cards
Credit cards have become a popular purchasing tool in the modern era. The users are able
to purchase goods within the monetary limit stipulated by the issuer. Subsequently, the card
holder reimburses the utilized amount in installments (Arnold, 2008). There are various benefits
of using credit cards. However, there are some people who would rather abstain from any form
of fiscal advance. While this ideology has certain advantages over the use of credit cards, it also
has particular drawbacks. People who use credit cards are better off than those who refrain from
all forms of loans.
Firstly, refraining from loans may be inconvenient when one has limited resources.
Individuals who uphold this philosophy believe in saving money to purchase the desired item.
On one hand, this approach ensures that the individual does not spend money beyond his or her
purchasing power. Such people are of the opinion that relying solely on one’s savings is helpful
in conducting a comfortable lifestyle that does not entail the pressures of paying debts (Mooney,
2015). However, a person’s financial status may hinder them from meeting certain needs or
wants. Such a scenario warrants the use of a credit card. This purchasing tool allows individuals
to make payments for purchases within a specific limit and pay later in monthly installments.
Evidently, credit cards increase one’s purchasing power.
Additionally, credit cards act as a suitable buffer against unseen expenditures. Financial
experts indicate that everyone should maintain an emergency fund that equates to between six
and twelve months of one’s monthly earnings. The accumulated finances are necessary to cope
with unexpected events such as medical emergencies or a layoff. Unfortunately, the high cost of
living in the modern era may make it difficult to accumulate these finances (Mooney, 2015). A
credit card is helpful in dealing with the incurred expenses during such difficult periods. A user