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Advantages and disadvantages of credit cards

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Your son is a freshman in college. During a recent weekend visit to campus, you noticed a credit card statement on the desk in his dorm room. Compose a letter to your son explaining the advantages and disadvantages of credit cards. In your letter, provide guidance to your son on the responsible use of credit.

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Solution Summary

The solution describes the advantages and disadvantages of using credit cards. Solution is in letter form and explain how it can become a useful instrument if used with care.

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Dear Son

I am happy to learn that you have started using credit card for your financial transactions. I would like to share my thoughts about credit cards so that you can understand how it can help you.

A credit card is an asset to lifestyle, but if not handled carefully it can become a liability, especially when one loses control of spending.

Credit Card not only provides free use of funds (if balance is timely and fully paid), it is easier to carry than cash. It ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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