ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Using credit also has some disadvantages. Credit almost always costs money. You have to decide if the item is worth the extra expense of interest paid, the rate of interest and possible fees. It can become a habit and encourages overspending.

Detailed explanation-2: -Without having to hand over actual cash or see a specific amount pulled from a bank account, purchases on the credit card can feel less expensive and can add up quickly. Debt accumulated on credit cards can be very damaging and difficult to pay back because of high interest rates.

Detailed explanation-3: -In other words, if you carry a balance, all your purchases will end up costing you a little more. Fees: Some accounts have annual fees. There may also be fees for cash advances, along with high interest rates. In addition, you may spend more on interest and fees than you earn in discounts or cash back.

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.

Detailed explanation-5: -Credit Discourages Self-Control. It Likely Means You Don’t Have a Budget. Interest Is Expensive. Rates Can Rise on Unpaid Balances. A Poor Credit Score Hurts More Than Just Your Credit. Bad Habits Risk Your Relationships. Using Credit Leads to More Spending. It Can Lead to Bankruptcy. More items