Over the years, the popularity of checking accounts and credit cards has increased significantly due to the associated advantages. The two provide numerous beneficial conveniences to consumers, including facilitating easy payment of bills, accessing finances across multiple platforms, and allowing an unlimited number of transactions. For instance, a checking account allows instant access to one’s finances through various channels and instruments, such as checkbooks, debit cards, and even provides a head start on money management. However, this account type is disadvantageous since it attracts nil to minimum interests on held funds and levies transaction fees when customers access their finances through ATMs of other banks. Conversely, credit cards provide multiple convenient benefits, including fraud protection, making a purchase today and pay the card’s balance in the future, and expanding the user’s purchasing power. However, this service encourages impulse buying, increases susceptibility to card fraud, and the possibility of high-interest rates. Even though checking accounts and credit cards provide multiple conveniences, consumers should plan and manage their accounts to enhance their productivity and financial priorities.
Credit cards attract high-interest rates, especially when not paid in full by the due date. However, users can utilize various strategies to avoid paying the exorbitant fees levied by the providers. For instance, consumers should plan to offset the amount due every month fully, avoid late payments which attract hefty penalties, and keep their expenditures within the card’s limit. Additionally, setting up automated subscriptions can protect users from missing any payments and the subsequent imposition of fines for late reimbursements. Notably, good planning and account management enhances productivity and promotes a focus on financial priorities. According to Abeyrathna (2020), individuals can control and monitor their monetary resources to ensure their effective utilization in fulfilling commitments and addressing the most critical needs first. This equips people with financial stability and protects them from financial pitfalls. For instance, effective planning and management eliminate the penalties stemming from late or non-payments, and the saved funds can be channeled towards enhancing an individual’s bargaining power.
Conclusively, checking accounts and credit cards provide consumers with multiple benefits and conveniences, which makes their daily financial transactions easy. Despite the numerous advantages, the two have various disadvantages, which require users to be equipped with financial managerial skills to avoid the associated detriments. Therefore, effective planning and management of checking accounts and credit cards ultimately improve a person’s productivity and focus on their financial priorities.
Reference
Abeyrathna, G. (2020). Factors affecting to personal financial management behaviors of government employees in Sri Lanka. International Journal of Scientific and Research Publications, 10(5), 761─767. Web.