FINANCIAL LITERACY
Pros and Cons
Pros
Savings - Savings can grow quickly due to compound interest.
Credit Cards - Money is instant, there is no need to save up for months just to purchase one item.
Personal Loans - Allows you to purchase an item, for example a car, and use it now and make repayments later.
Term Deposits - Term deposits are a low risk, low expense way of investing. Flexible time periods also make them appealing.
Shares - Potential for high return.
Cons
Savings - Money is not instant, it could take months to get to the goal sum you need.
Credit Cards - Large fees and high interest rates can make repayments difficult and you could end up paying for more in repayments than you did for the item purchased.
Personal Loans - Interest rates can be high if payments are met. They can also perpetuate a cycle of debt if they cannot be paid off.
Term Deposits - Money is locked in, you aren't able to withdraw any money from the deposit until it's maturity.
Shares - Although the potential gain is high, so are the potential losses. Shares are a high risk market and therefore are not guarenteed to make a return.