Limitations of credit cards - source of finance, Finance Basics

Limitations of Credit Cards - Source of Finance

Limitations of Credit Cards as a Source of Finance are as follow:

i) These cards lead to overspending on the part of the holder and like many disorganize the organization's cash budget and cash planning.

ii) Limited like to the activities they can finance like they are ideal for financing working capital items and not fixed assets whether case they are not a profitable basis of finance.

iii) They are expensive to maintain and acquire since of associated cost such as ledger fees, insurance, registration, commission expenses, renewal fees or etc.

iv) It is a short-term basis and is open just too a few establishments whether case a company can acquire goods and services from those establishments such can accept them.

v) Entail a lot of formalities to obtain as e.g. of no guarantees, presentation of bank statements and even charging assets such are partially pledged to secure expenses such may be incurred using these cards.

vi) They may be misused via dishonest employees who may employ them to defraud the organization off goods and services such may not advantage as for organizations.

vii) Credit card organization may suspend the use of such cards not with any notice and this will inconvenience the holder who may not meet his/her ordinary needs acquired through these cards.

Posted Date: 1/29/2013 5:14:12 AM | Location : United States







Related Discussions:- Limitations of credit cards - source of finance, Assignment Help, Ask Question on Limitations of credit cards - source of finance, Get Answer, Expert's Help, Limitations of credit cards - source of finance Discussions

Write discussion on Limitations of credit cards - source of finance
Your posts are moderated
Related Questions
Cash Management Techniques The basic strategies that must be employed via the business firm in managing its cash are as: i) To pay account payables as behind as possible wi

1. Suppose company A expects to increase unit sales of i-phone by 15% per year for the next 5 years. If you currently sell 3 million i-phones in one year, how many phones do you ex

on may 1, counts, inc has a balance of $1000 in office supplie. during may the company buys $500 more of the office supplies. on may 31 the company counts the supplies and finds 20

From the following cost, production and sales data of Decors Motor Ltd., prepare comparative income statement for three years under (i) absorption costing method, and (ii) marginal

Materials Management - Supply Chain Management Materials management was once a task undertaken without the assistance of computers. Today it is unthinkable as the speed of cal

Determinants of Working Capital Needs There are few factors that determine the firm's working capital needs. These factors are comprehensively enclosed with a Textbook of Busi

Comparison between Debt Finance and Ordinary Share Capital Differences between Debt Finance and Ordinary Share Capital as Equity Finance as   Ordina

Consider an economy with three dates {t=0, 1, 2}. A firm has assets in place that generate an output (profit) of either 40 in state L or 160 in state H at t=2. Bothe states equally

Explain about the New Issue Market OR Primary Market New issue market is the segment in which new issues are made. In new issue market, new issues may be made in 3 ways name

Debtors Collection Period - Formula Fomula is given below: Debtors collection period = 365/ Debtors turnover Or (365 x Average debtors)/ Annual credit sales This