Do you have a budget that lists you monthly bills? Are you one of those people who repay your credit card debt, only to use the card to get cash advances online? Who is seeing your credit rating? It is your responsibility to be aware of exactly what is happening with your budget and expenses. Credit card suppliers are always on the lookout for new customers who wish to get a line of credit, or to retain their current customers and get them to use their cards instead of using another company’s. The main aim behind these creditors promoting the usage of their cards is that the more people who maintain a balance on their card, the more interest their company will earn on those balances.
Even if the rate of interest is small, it accumulates over time. Are you comfortable with knowing that you have an unpaid balance because you are able to afford the payments when they are due?
Many credit card holders do not perceive this to be the power of having credit, but view it as having their spending power extended for a longer period. In the instances where there is an unexpected expense, it is one of the easiest things to pop out the plastic, pay and go your way. This is exactly why credit card companies rake in profits in the billions each year. Can you imagine what it would be like to have that in cardholders’ bank accounts?
Look closely at your credit card statements and see the exact amount that you have been charged for interest for just the current year. Can you see how much the small amounts become over time? Many people are complacent with their credit card bills. It is so serious, that they are no longer able to access it. If they forget to make payments, use the maximum amount on the credit card, or let the overdue balance be added to all of their other unpaid bills, it will steer their credit worthiness directly in line with getting online cash advances. If you are one of those who have a lot of outstanding debts, creditors may end up rejecting your application.
You are considered high risk and will not qualify for other lending solutions. If a credit score plunges to a sub-prime category, or lower, the options to get money in an emergency will decline drastically. You are not able to access affordable loans, so your debt becomes overbearing. Even if you are still able to meet your obligations, credit bureaus will now place this overdue debt in the bad debt zone, where other loans are concerned. After this happens, any thoughts you had of getting emergency money will be offered at a higher interest rate. This is done because other types of loans are sourced at a higher interest rate.
This is not a debt that you can have for a long period of time, as you will end up paying an arm and a leg for interest. The earlier the debt is repaid, the less chances you’ll have of paying more for the loan. Many times, when applicants for loans access a loan that is unaffordable, they prove to be detrimental to their finances. The interest that is charged to the client is considered a profit for the company, so you will have to decide which coffers you would rather your money be placed into. If you plan to avoid debt for any period of time, then you will have to be prepared when unexpected debts encroach on your budget.
You have to make provision for unexpected debts, as these can wreak havoc on your budget. Don’t get complacent with your debts. If you want to maintain a good credit score, by all means, use the credit card, but be sure to repay the entire amount that is used.
If you have expenses and can see no other way out, then your best bet would be online cash advances. With these, you are able to comfortably manage your debts. Pay attention to your finances, failure to do so can result in grave problems. Reduce your debts at all cost and open a savings account that is dedicated only to emergency situations. Your credit score is used to determine your credit worthiness, take an active interest in it now.