Understanding Credit

Credit is an integral part of everyday modern life. From buying movie tickets, to paying for a meal at a restaurant or buying a car, credit is used. The most common use of credit is through credit cards.  Knowing how to use credit wisely is a critical part of managing your finances and key to your financial health.

Advantages of using Credit:

• Able to buy need items now
• Don’t have to carry cash
• Creates a record of purchases
• More convenient than writing cheques
• Consolidates bills into one payment

Disadvantages of using Credit:

• Interest (higher cost of items)
• May require additional fees
• Financial difficulties may arise if one loses track of how much has been spent each month
• Increased impulse buying may occur