Good Essay On Consumer Credit

Most of the consumers today use four main ways of payment for transactions. These are the Credit card, Debit card, Checks and cash. The prime concern of this paper is the advantages and disadvantages of the debit cards as compared to the credit card and checks.

Advantages

Time- Purchases using debit cards take a little time to complete because traders accept hem more readily and with less scrutiny than the other two forms. Transactions are thus completed quickly and conveniently. Enhances discipline in spending- a debit card user is only allowed to spend the money that is present in the account during the transaction. This prevents the card holder from overspending which would otherwise lead to being charged extra fees because of the overdraft. Application process- they are relatively easier to acquire than credit cards because most banks give you a direct link to your account without undergoing a lengthy application and vetting process. Fees- debit account holders normally incur fewer fees than credit account holders. This is unless the holder engages in an overdraft transaction which would lead to hefty fees or penalties.
On the other hand, there are the disadvantages of using a debit card over other payment methods: Legal protection- debit cards offer less legal protection than the other payment forms in cases of fraud. If someone gets your Personal Identification Number, they could easily clean all the money in your account. Further, in the event of a loss or theft of the card, if it is not reported in good time, the holder would be liable for any purchases made by the card.
Credit scores- the holder’s credit score does not improve. Building up your credit score is important for a stable financial future. Paying for online purchases or others using a credit card is an effective way of increasing credit card ratings something which debit card holders are unable to enjoy.
Disputed charges are more difficult to resolve and take more time. The time spent by banks investigating the disputed transactions could be lengthy, and the account holder would be unable to access his funds during the investigation period. Rewards- credit card users take advantage of cash, travel, attractive discounts and other perks when they use their cards. These rewards are in most cases unavailable to debit card holders.
1. Car Loan.
Car loans are one of the most popular types of loans advanced to workers. This is primarily owing to the significance of transportation in today’s world.

Loan amount: $ 15000

Instalment price (per month): $332.01
Interest rate (per year): 3.0%
Term (in months): 48

References

Bank Rate. (2015, March 7). Bank Rate. Retrieved from Bankrate.com: http://www.bankrate.com/