The accurate information about the benefits and risks of using credit cards to make purchases includes the following: Benefits:
- Credit cards provide convenience by allowing you to make immediate purchases without carrying cash.
- They help build credit history when used responsibly and payments are made on time.
- Many credit cards offer rewards such as cashback, air miles, and points for purchases.
- Credit cards offer consumer protections like fraud protection and the ability to dispute purchases.
- They help track expenses and often come with additional perks such as discounts, premium experiences, and identity theft protection.
Risks:
- Misusing credit cards can lead to debt, high interest charges, and damage to credit scores.
- Carrying unpaid balances accrues interest, often at high rates (around 20% on average).
- Overspending beyond means or missing payments can negatively impact credit scores.
- Credit card numbers can be copied or stolen despite fraud protections.
- Large purchases on credit cards can increase credit utilization ratio, potentially lowering credit scores.
In summary, credit cards are beneficial tools when used responsibly, offering rewards, convenience, and protections but come with risks like debt and credit harm if not managed well.
