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Give one advantage and one disadvantage of buying on credit - Junior Cycle Home Economics - Question 8 - 2006
Question 8
Give one advantage and one disadvantage of buying on credit. Advantage Disadvantage
Worked Solution & Example Answer:Give one advantage and one disadvantage of buying on credit - Junior Cycle Home Economics - Question 8 - 2006
Step 1
Advantage
Answer
One significant advantage of buying on credit is that it allows consumers to acquire goods sooner than they might be able to if they were paying in cash. This can be particularly beneficial for larger purchases, such as a car, where immediate access to the product is important. Additionally, using credit helps to avoid the need to carry large amounts of cash, which can be both risky and inconvenient, and it can protect against price increases by allowing a purchase to be made at the current price.
Step 2
Disadvantage
Answer
A primary disadvantage of buying on credit is the potential for incurring high interest rates, which can significantly increase the total cost of the purchase over time. Furthermore, buying on credit can promote overspending, as individuals might purchase more than they can afford to pay back, leading to difficulty in making payments.