What are the advantages of using credit?

Credit can make your life easy, as it does for Adelle and James.

Adelle was recently approved for a credit card. She has been saving money for six months to buy a brand new washer and dryer so she doesn’t have to deal with the Laundromat anymore. She’s now ready to make the purchase. Going to the store with a large amount of cash in her purse makes her nervous, so Adelle plans pay for the items with her credit card instead. She’s already deposited her saved cash into her checking account, and is ready to pay the credit card bill when it is due. Credit helps Adelle for four reasons: 1. She doesn’t have to carry a large amount of cash into the store. 2. Should anything go wrong with the washer or dryer, Adelle can easily return or exchange it within the warranty period. 3. If the store she bought them from doesn’t want to refund or exchange the washer or dryer, Addelle’s credit card company may pursue the refund or exchange on her behalf. 4. Adelle builds good credit, first by using it, and second, by paying her bill in full and on time.

James has been saving money for a down payment to buy a used truck for his business. He just found the perfect deal. He’ll make the down payment and get a loan now to pay for the balance of the truck later. James has a steady job he’s been at for five years. The financial institution that loaned him the money is confident James can cover the monthly loan payments with his income. James will get his car now and pay for it with money he knows he’ll make later.

Credit helps James in two ways:
•	He could not afford to pay for the truck in full today. He’ll make payments on the loan over a period of four years.
•	He builds good credit by making his monthly payment on time.