Credit Talk: The Advantages and Disadvantages of Credit.

In today's world, credit plays a prominent role. From buying a car to booking a flight, credit is a large part of our daily schedules. However, there is both advantages and disadvantages you should be aware of as a responsible consumer!

First, what is a credit score?

This number represents a person's worthiness to use credit. This number tells lenders how reliable you are and how likely you are to pay back a loan. It is based off of a variety of financial factors. The higher it is the more credible you are.

Advantages Include:

- buy needed items right away

-eliminates bringing cash/ convenient access to money rather than checks

-allows for a record of purchases

-handy in emergencies

-you can access services and merchandise you cannot afford in the present time

-you can purchase items and services, and not pay back until a later date

Disadvantages Include:

-Interest is present which creates a higher price in the long run

-may contribute to spending more money or impulse buying

-overspending

-reduces money to be used in the future

-can lead to a poor credit score if not used wisely

-there are often additional fees charged when using a credit card

-can run into financial issues if you go over the set amount or loose track

In order to be a responsible consumer you must be aware of both the advantages and disadvantages. Next blog post we will discuss what it really means to be a responsible consumer and your rights as a credit user!

Sources Cited

“Free Financial Literacy Lesson Plans for High School Teachers.” InCharge Debt Solutions, 2 Dec. 2021, www.incharge.org/financial-literacy/resources-for-teachers/high-school/.

KLTELT KLT KLT G1802 Credit Advantages, Disadvantages and Common Types. extensionpublications.unl.edu/assets/pdf/g1802.pdf.