If you don’t use credit cards and loans the right way, you can really set yourself back when it comes to your personal finances. You need to know how to handle them correctly, and that requires a knowledge base before you ever get started. Continue reading for helpful advice concerning using credit cards and taking advantage of loans the right way.
If you’re going to get a credit card, or more than one, you need to find one that gives you special benefits. There are reward cards that offer airline miles and cash back, and these are what you need to look at. There are also other kinds of reward cards. Take a look at your options, and find one that is right for you. In order to build your credit properly, you need two major credit cards.
Understanding Credit Cards Interest
When using your credit cards, you want to make sure that you don’t use more than approximately thirty percent of your total allowable credit. In essence, you should be paying off your balance each month. This will give you the best credit rating, and it will also save you the interest on your credit cards, freeing up you finances and budget.
You should never think of your credit cards for cash advances. Why you ask? Cash advances on your credit cards are at an even higher interest rate than you pay for purchases. It is unreal, and you don’t need to take advantage of this trap. You should have the cash to begin with before you ever use a credit card if possible. You should only be paying off the balances to build your credit. If you need a few weeks to come up with the money, that is fine. You pay it by the end of the bill cycle. However, cash advances are taboo.
When it comes to loans, you need to make sure you stay away from payday loans. These types of loans seem irresistible to many who are in need of fast cash, and they are a trap. Payday loans offer an interest rate that is so high that they should seriously be considered entrapment. This is the opposite of saving up for an emergency fund, and that is why you should have one.
Consolidate Credit Cards Debt
When you can, you should try and consolidate loans. Credit cards let you consolidate from time to time, and this can be helpful. However, you want to be wary and investigate any balance transfer options before you agree. Also, consolidating student loans is a great option. This can lower your payment and your interest rate, and you can save so much money. Of course, you need to investigate terms as always, but this is usually a good option.
The use of credit cards and loans is crucial to your financial situation. You must be responsible, and you must make the right decisions. One bad decision can cost you, so you must make sure you’re always on top of your game when it comes to credit cards and loans.
