What are the downsides of revolving credit

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Revolving credit has a lot of benefits but it also has some downsides that you should be aware of before you take one.

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One of the major downsides is that it is easy to get in trouble with if you aren't careful and run up a big balance.

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Revolving credit accounts typically come with higher interest rates than loans, and some accounts may have fees.

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Failing to pay back what you borrow each month can result in high interest charges that can cripple you financially.

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Additionally, it can be easy to let it get out of hand since interest rates are high and balance can compound over time.

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The temptation to make impulse purchases and worry about paying them later can lead to severe financial problems.

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However, revolving credit can be a useful financial tool if used properly. Avoid overuse to prevent financial strain.

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Revolving credit can also be a great way to build credit history and boost your credit score if you use it responsibly.

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Make your minimum payments on time, try and pay back in full monthly, and keep your credit utilization ratio below 30%.

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