Buying something on credit can have disadvantages. One of the disadvantages is that interest is added to the amount borrowed, which increases the total debt. This means that in addition to paying back the original amount borrowed, you also have to pay extra money in the form of interest.
For example, if you buy a $100 item on credit with a 10% interest rate, you would end up paying $110 in total ($100 for the item and $10 in interest). This additional cost can make the purchase more expensive in the long run.
Another disadvantage of buying on credit is that it can potentially harm your credit rating if you don't make timely payments or carry a high amount of debt relative to your credit limit. This can affect your ability to borrow money in the future or get favorable interest rates on loans.
In contrast, the option "You may get protection for cash purchases that are lost, damaged, or stolen" is not a disadvantage but rather a potential benefit of using certain credit cards that offer purchase protection as a perk. This can be advantageous in situations where items bought on credit are lost, damaged, or stolen.
Lastly, the statement "Paying for things on credit will hurt the economy, by taking money out of circulation" is not accurate. In fact, when people use credit to make purchases, it keeps money circulating in the economy and contributes to economic activity.
