ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Credit cards have a few disadvantages, such as high interest charges, overspending by the cardholders, risk of frauds, etc. Additionally, there may also be a few additional expenses such as annual fees, fees of foreign transactions, expenses on cash withdrawal, etc. associated with a credit card.

Detailed explanation-2: -Not having a credit card will make it harder to build up your credit score, which can affect you as you try to reach other major financial milestones. “In the future, if you plan to take out an auto loan or a mortgage, you need to have a decent credit score, ” Solomon said.

Detailed explanation-3: -The pros of credit cards range from convenience and credit building to 0% financing, rewards and cheap currency conversion. The cons of credit cards include the potential to overspend easily, which leads to expensive debt if you don’t pay in full, as well as credit score damage if you miss payments.

Detailed explanation-4: -Minimum due trap. The biggest con of a credit card is the minimum due amount that is displayed at the top of a bill statement. Hidden costs. Easy to overuse. High interest rate. Credit card fraud.