Save Money credit

Published on May 16th, 2013 | by Pete

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Sensible borrowing and benefits of credit

Borrowing and smartly utilising credit is one of the better ways to keep your finances in the clear and produce money in advance of when you really need it. Of course, like anything else, it helps to know as much as possible.

Whether it’s using credit cards as a form of cash advance, starting a reliable credit rating or any other measure, there are many ways to assess credit options.

Cash advance

Borrowing is often done when expenses need to be paid. When the money can’t wait, you often need a way to generate cash in advance. This is where a lot of modern ‘payday’ loans come from. These, however, are still instalment loans whereas credit cards, as revolving credit, can provide a more useful answer.

A good example of this would be the classic aquacard. This card offers a highly competitive rate of 32.9% APR. Yet the interest isn’t even added if you pay off your balance on-time each month. In other words, borrow affordable amounts that you can repay when you receive your income and you won’t suffer any additional costs.

Likewise, there are other cards that reward this in the long run. Whereas additional instalment loans would add up on each other, a credit card can be more easily managed. The advance card from aquacard, for instance, offers a rate of 34.9% which can be reduced, through successful repayments of the balance, by 5% for three years. This potential brings it down to 19.9% APR. If there’s a strong chance you’ll use your credit card this frequently, this can prove very rewarding in the long run.

Credit Rating

On a similar note, this form of borrowing not only provides you with beneficial credit, it can also be used to earn a good credit rating. If you have a bad rating, or no rating at all, it’s more difficult to get the best loans or get a decent interest rate.

As such, if you apply for a credit card such as those discussed above, it can help you improve your credit rating. Not only are you meeting your own fiscal needs, you’re also earning a good rating through constant repayments. This looks good from a financial point of view, making any potential creditor more confident in your ability to repay debts and understand the responsibility involved.

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