what are the advantages and disadvantages of credit?
Answers
Explanation:
The Benefits of Using Credit
Save on interest and fees. The biggest benefit of good to excellent credit is saving money. ...
Manage your cash flow. ...
Avoid utility deposits. ...
Better credit card rewards. ...
Emergency fund backup plan. ...
Avoid and limit financial fraud. ...
Purchase and travel protections. ...
Don't underestimate the power of good credit.
Here are the biggest disadvantages of credit cards:
Easy to overspend. Since you're not using physical money or a checkbook and don't have to pay right away, credit card purchases may not feel quite as expensive when you make them. ...
High interest rates. ...
Fraud. ...
Confusing terms. ...
Multiple ways to hurt your credit.
Advantages :
1. Opportunity to build credit.
2. Earn rewards such as cash back or miles points.
3. Protection against credit card fraud.
4. Free credit score information.
5. No foreign transaction fees.
6. Increased purchasing power.
7. Not linked to checking or savings account.
Disadvantages :
1. Established credit-worthiness needed before getting a credit card
2. Encouraging impulsive and unnecessary “wanted” purchases
3. High-interest rates if not paid in full by the due date
4. Annual fees for some credit cards – can become expensive over the years
5. Fee charged for late payments
6. Negative effect on credit history and credit score in case of improper usage