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The Pros And Cons Of Using Credit Cards For Your Personal Finances As A Ghanaian Expat Worker

27 Jun 2023

As a Ghanaian expat worker, have you ever found yourself mulling over the idea of getting a credit card? Or perhaps, you already own one but aren't fully versed on its pros and cons? Either way, this article will delve into the various aspects of credit card usage that can impact your personal finances and your every money transfer to Ghana from abroad.

The Concept of Credit Cards

To begin with, let's unravel the concept of credit cards. Simply put, a credit card is a payment card issued by a financial institution, mainly a bank, that enables cardholders to borrow funds with which to pay for goods and services.

How Credit Cards Work

A credit card extends a line of credit to the user, and the cardholder is obligated to repay the borrowed amount along with any applicable interest. Furthermore, credit cards often come with a pre-set credit limit, which is the maximum amount a cardholder can borrow.

People who responsibly use credit know that using a credit card can be one of the best and most secure ways to cut costs and enhance your overall financial situation. The issuer will give you a line of credit once your application for a credit card is approved. 

You must reduce that balance each month when your billing cycle ends to avoid having to pay interest at the rate you were charged. One of the biggest drawbacks of credit cards is their high-interest rates, which can quickly lead to mounting debt balances. However, there are also many advantages if you can pay off your balance in full and on time.

Do People In Ghana Use Credit Cards?

Yes. However, only a small portion of Ghana's population uses credit cards. About 1.7 million Ghanaians use credit cards. 5.8% of Ghana's population consists of that. In Ghana, 0.9 per cent of people over the age of 15 had at least one credit card as of January 2023. This represented a sharp decline from the prior year and represented the lowest share since 2018. 

This is also in line with a declining share of people with financial institutions' accounts. Using credit cards for personal expenses as a Ghanaian expat worker has both benefits and drawbacks. You need to take your financial matters seriously to send money to Ghana. The following are pros and cons to take into account.


The Pros of Using Credit Cards

So why should a Ghanaian expat worker consider using a credit card? There are several compelling reasons.

Building Credit History

Having a credit card and using it responsibly can help build a solid credit history. This can be beneficial in the long run when you need to apply for loans or mortgages. Timely repayments signal to lenders that you are a low-risk borrower. This can also help you to ensure instant financial assistance back home in emergencies through a swift online money transfer to Ghana from overseas.

Cash Back and Rewards

Many credit card companies offer cash back, points, or rewards for purchases made using their cards. This means you can earn while you spend, providing a slight relief to your budget.

Emergency Fund

In case of unforeseen circumstances, having a credit card can be a real lifesaver. It allows you to make necessary purchases or payments, even if you do not currently have the funds on hand.


You don't need to stress about having enough money on hand. Just keep in mind that you can always use a debit card in place of cash. Unlike with a credit card, you won't run the risk of accruing debt that will be subject to high-interest rates if you don't pay it off each month. To make sure you can afford the items you're buying, keep an eye on the balance in your checking account. 

Increase Credit

Some of the best tools for gradually establishing credit are credit cards. Your financial situation will be greatly affected by your credit score. You'll be more likely to be approved for loans you might require in the future, such as mortgages and auto loans, if you have excellent credit. 

You can also get better loan terms with a good credit score, which will help you avoid paying too much interest throughout the loan. If you want to establish credit using a credit card, it's imperative to pay at least the minimum amount due by the due date each month.

The three major credit bureaus receive monthly reports from credit card issuers about your account activity, so you should establish a consistent history of good information. To maintain a low credit utilisation rate, you should avoid making late payments, not use all of your available credit, and refrain from making frequent credit requests.

Security Enhancements

Due to the additional consumer protections provided, credit cards are a great choice for everyday spending. As long as you report unauthorised charges within 30 days, most credit cards offer zero-liability fraud protection. Even if your issuer does not offer zero liability, the Fair Credit Billing Act only allows you to be held liable for $50 for unauthorised charges.

Furthermore, you might be able to fix the problem before your balance is due and real money is lost if unauthorised charges are made to your credit card account. However, since you'll have to wait for the money to be transferred back to your bank account if your debit card information is stolen, the problem may take much longer to fix. On the other hand, if you want to send money to Ghana securely, you can use ACE's services. 

The Cons of Credit Cards 

While using a credit card can significantly increase the value of your purchases, there are also risks involved. Here are a few points to consider before you apply for a new card:

High Fees And Interest Rates

Interest rates on credit cards are infamously high. The current average APR for credit cards is around 20%, though some cardholders have rates that are even higher. However, there are other expenses associated with using a credit card besides interest rates. 

Many credit card companies impose late fees, foreign transaction fees, balance transfer fees, and other charges. To understand all potential fees and how to avoid them, make sure you read all of the conditions of your card agreement.

Increasing Debt 

Debt accumulation may be caused by excessive spending or reliance on credit cards. To prevent getting trapped in a debt cycle, it's critical to use credit cards responsibly and only charge what you can afford to pay back each month. Failure to manage a credit card effectively can lead to severe debt accumulation. This can have long-term impacts on your financial health and credit score.

Affecting Your Credit Score Potentially

While there are many ways to build credit with a credit card, including having a good payment history, maintaining a low credit utilisation rate, and diversifying your sources of credit, you can also damage your credit score by engaging in poor credit behaviours.

Additionally, applying for multiple credit cards at once may temporarily lower your score. Every time you apply for credit, the issuer runs a hard credit inquiry, which may cause a small drop in your credit score. Applying for multiple new accounts at once can also raise the alarm with lenders and make you appear less creditworthy than if you wait longer between applications.

Overspending Tendencies

Credit cards can also lead to a tendency to overspend. Since you're not immediately parting with your cash, it can be easy to lose track of how much you're spending.

In comparison to other nations, Ghana uses credit cards less frequently. Many Ghanaians continue using cash for purchases or other alternative payment forms, like mobile money. In particular, industries like oil and gas, mining, and international organisations employ many foreign workers in Ghana. These expats might have different monetary requirements and preferences than the local population. You may also want to know if there are any limits On the Credit Card Transfers.

In their home countries or other nations where credit card usage is more common, expats may use credit cards to access international banking services and conduct transactions.

Credit Cards and The Ghanaian Expat Worker 

For a Ghanaian expat worker, credit cards can be a double-edged sword. They offer convenience, especially in handling international transactions, but they also come with potential pitfalls. The decision to use a credit card as a Ghanaian expat worker should be taken with careful consideration. It's crucial to weigh the benefits, such as the convenience of international transactions and the potential for rewards, against the drawbacks, such as high-interest rates and the potential for overspending. As with any financial decision, it's essential to make informed choices and manage your credit card use responsibly.

Credit cards can add value to your financial portfolio if they are used responsibly. The right credit card can help you save money on regular purchases, get more out of ancillary benefits, and raise your credit score. Once you've made the decision to get a new credit card, you can base your decision on a few factors to determine which one is best for you. 

Among other card information, these comprise the kind of card you have, any rewards you may be eligible for, the interest rate you'll be charged, and any additional fees you may incur. You can use your credit or debit card to send money to Ghana online if you need the money right away.


Is A Credit Card Beneficial Financially?

You should consider your financial situation seriously before deciding whether a credit card is the best option for you. Obtaining a credit card at the age of 18 can, if used responsibly, start the process of building credit. Credit card debt will, however, result in a serious financial disaster if you don't make your payments on time.

What Is The Main Distinction Between Using A Credit Card And A Debit Card?

Almost immediately after making a purchase with a debit card, money is deducted from your checking account in the amount of the purchase. When you use a credit card, the purchase will be added to your available credit, which means you will pay the bill later and have more time to pay.

Why Are Credit Cards Good Or Bad?

Only if you use your credit cards responsibly can they assist you in raising your credit score. The two main components of your credit score are the amount borrowed and your payment history. For borrowers with a bad credit history, secured credit cards are an option. 

What Makes Credit Cards Secure?

Today's top credit cards almost universally offer zero fraud liability for unauthorised charges, meaning that you won't be responsible for paying anything for any charge that turns out to be fraudulent. Debit cards also have a $50 fraud liability cap, but you have to report a lost or stolen card within two business days to get that cap lifted.


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