Which of the following is a disadvantage of credit transaction?

A disadvantage of credit transaction is that it encourages bad debt. Credit transactions involve buying goods or services on credit, which means that the buyer does not have to make immediate payment for the goods or services. Instead, they are given a period of time to pay off the debt. While this can be convenient for consumers, it can also lead to bad debt if the buyer is unable to repay the debt on time. Bad debt is a debt that is unlikely to be repaid and can lead to financial losses for the creditor. In contrast, credit transactions can have advantages such as increasing turnover, facilitating the sale of durable goods, and enabling consumers to enjoy goods without immediate payment. However, the risk of bad debt is a significant disadvantage of credit transactions that creditors need to manage carefully to avoid financial losses.