Financial Counseling Certification Practice Exam 2026 – Complete Prep Guide

Question: 1 / 400

What is a common disadvantage of using credit cards?

Interest-free periods

High-interest rates

High-interest rates are a common disadvantage of using credit cards. When balances are not paid off in full each month, customers can accumulate significant interest charges on their unpaid balances. This compounding effect means that purchases can end up costing much more over time than their initial price. High-interest rates make it easy for consumers to fall into debt, especially if they rely on credit cards for everyday expenses and do not prioritize timely repayments.

This concern is particularly vital for individuals who may find it challenging to manage their finances, as they might be tempted to carry a balance, leading to growing debt and financial stress. Understanding the implications of high-interest rates can help individuals make more informed decisions about credit card use and consider alternatives for managing their finances effectively.

Get further explanation with Examzify DeepDiveBeta

Convenient payments

Automatic spending limits

Next Question

Report this question

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy