Advantages and disadvantages of using credit

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Advantages and disadvantages of using credit

  1. 1. 1.4.1.G1 ard t C ard edi t CCr ediCr Advantages to using Credit Cards Advantages Convenient payment tool Protection against fraud Opportunity to establish a Useful for emergencies positive credit history Online shopping is safer than using a Often required to hold a reservation debit card because of the Fair Credit Billing Act protection Able to purchase “big ticket” items Possibility of receiving bonuses, such and spread out payments as frequent flyer miles or cash rebates © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
  2. 2. 1.4.1.G1 ard t C ard edi t CCr ediCr Disadvantages to using Credit Cards Disadvantages Interest can be costly when Responsible for lost/stolen cards a balance is revolved Additional penalty Applying for multiple accounts can fees may apply lower your credit score Tempting to overspend Risk of identity theft © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona

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