What are the advantages of credit facility?

Benefits of credit facility A credit facility is quite flexible (unlike bank overdrafts) You get to borrow multiple times during a set period of time. You only repay interest on the amount borrowed. You can lock in a fixed rate of funding.

Which of the following is an advantage of using a credit card?

The use of a credit card, instead of cash or personal funds, offers the following advantages: Building credit history. A quick source of funds in an “absolute” emergency. No accrued interest if bill is paid on time and in full each month.

Why would sellers resort to selling through credit cards?

An increase in sales may happen when you start selling on credit. Your customers are likely to buy from you as their cash flow is not disrupted and it is not necessary to pay upfront to competitors. Better customer loyalty. Offering credit to customers demonstrates trust.

What are three disadvantages of using a credit card?

The cons of spending with a credit card include:

• Paying high rates of interest. If you carry a balance from month-to-month, you’ll pay interest charges.
• Credit damage.
• Credit card fraud.
• Cash advance fees and rates.
• Annual fees.
• Credit card surcharges.
• Other fees can quickly add up.
• Overspending.

What are the disadvantages of selling on credit?

Disadvantages

• It can lead to bad debts. There is no guarantee that the customers will pay back.
• Loss of income/capital. Bad debt is a loss of income as well as loss of capital you have invested in buying the goods.
• Liquidity problems.
• Strained relationship.

What are some consequences of using a credit card?

Getting into credit card debt. If you have the wrong attitude about credit cards, it could be easy to borrow more than you can afford to pay back.

Missing your credit card payments.

Carrying a balance and incurring heavy interest charges.

Applying for too many new credit cards at once.

Using too much of your credit limit.

What do you feel is the biggest advantage of credit?

If you have a good credit score, you’ll almost always qualify for the best interest rates, and you’ll pay lower finance charges on credit card balances and loans. The less money you pay in interest, the faster you’ll pay off the debt and the more money you have for other expenses.

Why credit cards are better than cash?

Credit cards are safer to carry than cash and offer stronger fraud protections than debit. You can earn significant rewards without changing your spending habits. It’s easier to track your spending. Responsible credit card use is one of the easiest and fastest ways to build credit.