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Please help!

How can easy access to credit lead to Financial Mistakes and Bankruptcy?

User Scruffy
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1 Answer

5 votes

Answer: over-borrowing.

Step-by-step explanation:

credit cards function like this: you can "buy" a lot of things with it, including very very expensive things. this is because instead of really buying that product, you borrow money from the bank to buy it. you then have to pay it off in slower amounts of money over time until youve paid off the original cost of the product and more because the bank will most likely charge interest.

sounds great, right?

it is, until you cant afford to pay those smaller amounts of money. then, it starts to build up and if you still cant afford to pay the bank, they will begin to liquidize your physical assets (they take your stuff as payment, really anything, even your house can be taken.)

User Dj Bazzie Wazzie
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4.2k points