Credit. The pros and cons

The definition of credit is, the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future. Credit exists in many forms, the, cost common being a credit card. Each time you make a purchase with your credit card, you are using credit to pay for it. Some other forms of credit are loans and mortgages.

Credit, like almost everything, has its advantages and disadvantages. It’s important to understand these if you want to use your credit responsibly. Below is a chart of advantages and disadvantages of credit.

Advantages Purchase power, can purchases things you are in need of and pay it off later when you have money Protection of purchase. Credit card companies vouch for items stolen, or lost so you can get them back Can lead to you having a good credit, which can help you out later in life. Only thought, if you spend wisely Protects you in an emergency, when you don't have money and often provides some sort of benefits

Disadvantages Easy to overspend. Overspending will lead to interest fees which will increase your owed amount to increase, causing more debt build up. Interest rates extremely high in some cases, and can cause a lot of debt.

Credit is a helpful tool, as you could not possibly hope to buy a 320.,000 dollar house in cash straight up unless you have a very good salary, or if you get sick and nothing but your credit card to spend with. As long as it is used wisely credit is a usefull t you. Just make sure to pay it off and  chose a card which is right for you