Question

what are the advantages and disadvantages of using credit?

Answer 1

Answer-

Advantages of using Credit

1) Credit can be used to fulfill the needs and obligations
2) Credit can be paid in installments or EMIs and not at a time in lumpsum.
3) Repayment of installments or EMIs in time gives a good credit score or credit ranking which gives credibility to an individual or company
4)  Credit repayments are flexible in various tenures (for example like ranging from 3 years or 5 years or more )

Disadvantages of using Credit

1) Credit at higher interest rates will lead to higher interest amount
2) Default of repayment will badly effect the credit score or credit raking leding to unavailability of credit in future.
3) Credit is not easiliy available during economic downturns.