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Credit Card advantages:
Credit is a contract based on your promise
to pay in the future for goods and services you receive today. The
advantages of credit cards are significant, and "plastic" can be an
important resource in your money management plan. Credit cards offer
protection against theft of your cash. You can purchase the products and
services you need when you need them, even if you do not have the cash
in your pocket.
Credit cards are very helpful in emergencies, and many parents actually
prefer that their students carry a credit card to pay for such
essentials as gas, repairs, and towing. They feel more comfortable
knowing that their young adults have the to ability to take care of any
emergency quickly with a credit card. Also, you can become a better
money manager as you learn to use credit responsibly. |
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Interactive Calculators Use the
There are disadvantages, however,
to using credit. When you carry a credit card, it is easy to buy beyond
your means, to spend so much that you cannot meet the bill when it is
due. When you carry a credit card, it is very easy to buy on impulse and
forget you are spending future income, money that you do not yet have
(and may not have in time).
Moreover, if you only pay the minimum balance each month, you may be
surprised to find out how many years it will take to take to pay off the
balance. Interest charges really add up to increase significantly the
"bottom line" of the total of what you must pay . Also, it is rarely
wise to buy something that will wear out before you finish paying for
it, such as a vacation or a used bicycle. |
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