Credit Flashcards, test questions and answers
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What is Credit?
Credit cards are a convenient and secure way to make purchases, but there are some drawbacks that must be considered before signing up for one. A credit card is an electronic payment card that allows you to access funds or purchase goods and services on credit. They are issued by banks and other financial institutions, allowing customers immediate access to cash or goods without having the physical money in hand. The convenience of using a credit card can be very appealing. You don’t need to carry around large amounts of cash when making purchases, which can help reduce the chances of theft or loss. Credit cards usually offer rewards such as points or cash back when used at certain outlets or online stores, giving customers extra incentives to use them regularly. Credit cards also provide users with protection against fraud by limiting liability if their information is compromised in a data breach. Although there are many benefits associated with using a credit card, it’s important to consider the potential risks as well. Interest rates on some credit cards can be high, meaning that even small purchases may incur significant fees over time if not paid off quickly enough each month. Additionally, impulse buying is more likely when using a credit card since you’re not immediately seeing the cost due at checkout like you would with cash payments. Finally, missing payments could lead to late fees and penalty interest rates being applied not something anyone wants. In summary, while there may be some drawbacks associated with owning a credit card they remain popular because of their convenience and security features just remember to keep track of all your purchases and pay off any balances quickly each month in order avoid any additional costs.