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Credit cards and investments . Risks and rewards
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This document provides BRIEF notes an credit cards and the advantages and disadvantages as well as the risks and rewards of investments for your business.
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1. Two disadvantages of using credit cards- Potential high interest charges
- Risk of Frauds
2. Two examples of a type of a borrowing
- Personal loans
- PayDay Loans
3. Describe the likely financial needs and implications of a young adult.
- Some implications such as poor financial planning may be common due to the lack of
experience when using banks.
- Most young adults will need money for things like travel and expenses when going out with
friends.
4. The risks and rewards of saving versus investments.
The rewards of saving compared to investments is that there is no worry on if your money
will be lost due to the low risk compared to the higher risk when investing in businesses and
stock. Savings have quite a few benefits including providing a safety net for unexpected
events and liquidity for purchases and various other short-term goals in life.
The risks of saving over investment is that your money is just sitting there not gaining value
whereas when investing there can be money additionally to the money you put in at the
start. Another risk of saving over investing is that the low interest rate you receive when
saving will not keep up with growing inflation which will deflate the value of your money
when you need for retirement for example.
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