4.1.3 Pros and cons of using credit

From: Financial Consumer Agency of Canada

Borrowing money is neither good nor bad. Credit is a tool. As with all tools, whether it is positive or negative depends on how well you handle it.


  • You don't have to wait to save up the money to buy or do what you want. You can achieve your goals sooner.
  • You can build a positive credit history by using debt responsibly. This can make it easier to borrow in the future, perhaps for bigger and more costly goals.
  • It allows you to pay for unexpected expenses, such as car repairs.


  • You have to budget for regular repayments.
  • Interest adds to the cost of the debt.
  • Having to repay a loan limits the amount of money you have available, now and in the future, for other goals or needs.
  • If you don't repay loans it will result in a bad credit history, making it more difficult to borrow in the future.
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