Instead of simply using credit cards routinely for purchases and services, it is wise to be aware of some of the advantages and disadvantages of this method of payment.
- When you use credit cards or “plastic”, you are tempted to buy non-existent money in your bank account.
- When you use “plastic, you borrow money from a lender, you want your money back MANY interests.
- Consider the following fact: if you owe $ 10,000 in credit card with 18% interest rate, and you pay the monthly minimum (usually 2% of the outstanding balance, in this case $ 200), will take 57 and ½ pay their debt in full, and you will pay a total of $ 38,930.64 in interest!
- Use “cards” today, when you have no money, it means spending money going to win tomorrow, even before winning it, before you have time to enjoy it. Which means that when you receive your salary, can not keep it.
- If you use “cards” today, when you have no money, and for some unexpected reason has no money tomorrow, it is at risk of being unable to pay your creditor. When this happens, your credit history is negatively impacted by several years.
- If your credit is depleted, their quality of life will suffer. Future goals of obtaining a mortgage, a car loan, including medical coverage, may be difficult or impossible to get.
- Some people who are in a serious state of debt with your credit card, open up more and more credit card bills, hoping to stay afloat minimum pay outstanding balances on several cards, and obtaining cash advances to pay their other accounts. What I do not understand, is that instead of being a solution that simply are debts that add to the spiral and finances are increasingly out of control.
- “Cards” can be used to purchase goods and services you need at this time but can not afford at this time, as short-term emergencies.
- Cards may be more convenient than cash at times, like car rental, hotel booking, travel tickets etc.
- Some creditors give you benefits such as insurance when renting a car, miles, discounts, etc. that are given when you use your card.
- If you want to make a modification to a purchase made with the Credit Billing allows you to remove the payment for goods and services that have not been satisfied.
- If your credit card is lost or stolen, it is only vulnerable at $ 50.
- Using a card is the most convenient method of payment either physically, online or by phone.
The sensible and cautious use of credit cards is the best way to help you establish good credit.