LOANS AND CREDIT CARDS 2
Loans and Credit Cards
Loans and credit cards have become popular means for survival for people who believe
that they cannot survive without borrowing money from financial institutions. It is agreeable that
loans help people to manage emergencies and invest in projects that require a lot of money.
Moreover, loans and credit cards enable people to get easy and quick money for various reasons.
However, loans and credit cards are not necessary and people who abstain from these services
avoid extra expenses and disappointments associated with being in debt.
The money borrowed through loans and credit cards is usually repaid with interest.
Sometimes the interest charged on these debts exceeds the benefits of borrowing money from
financial institutions. In addition, the high interest charged on credit cards and loans debts may
sometimes be unreasonable and unmanageable. Failure to repay the loans and interest may attract
further penalties including additional fines. Some credit card companies provide an interest-free
period within which a borrower will not be charged interest for using the facility (Emekter, Tu,
Jirasakuldech, & Lu, 2015). However, this period is usually short and does not have a monetary
benefit to the user. In addition, the high rate of inflation and economic instability may force
financial institutions to adjust their interest rates compelling borrowers to pay higher fees for
using credit cards and loans. People who abstain from using credit cards and loans do not have to
worry about being in debt and incurring unnecessary expenses.
Secondly, living a debt free life enables people to focus on their lives and careers. Having
a loan is stressful and failing to pay one gives people depression and other health risks. There are
numerous disappointments associated with knowing that an individual owes institutions money
(Bhutta & Keys, 2016). Sometimes, uncertainties happen and render people jobless or limit their
sources of income. During unpredictable situations, people may fail to repay their loans on time.