Question

select all that apply
which of the following are disadvantages of using credit

paying for purchases over a period of time is more costly
it does not increase total purchasing power
temptation to overspend
flexibility in money management
failure to repay a loan may result in loss of income

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Explanation:

• Paying over time incurs interest, raising total cost.
• Credit does not add real purchasing power, just delays payment.
• Credit makes it easy to overspend beyond means.
• Missed repayments can lead to wage garnishment (loss of income).
• Flexible money management is an advantage, not a disadvantage.

Answer:

• paying for purchases over a period of time is more costly
• it does not increase total purchasing power
• temptation to overspend
• failure to repay a loan may result in loss of income