By | John Preston
There are many benefits offered by having a credit card, if you use them as a means of payment: they are not exposed when loading cash, you can make purchases online without much problem, they are comfortable, there are more and more establishments that he obtained, in some cases he obtains savings, and many other facilities if he uses them correctly.
However, if you see this instrument as the way out for all your men, as an inexhaustible source of financing and you handle it without the responsibility it deserves, you may have serious financial problems, damage your credit life and end up in debt.
Applying for or accepting a credit card should not be decided on the run or on impulse, if you have never taken one out or if you already have one and are thinking of taking out a new one, Here are 5 questions so that you can solve them yourself and, based on the answers and your particular situation, evaluate whether or not it is convenient for you to do so.
Do you really know how a credit card works?
It is not a savings account or a checking account, the money you have there is not yours, it is money that the bank lends you, therefore, the amount you use must always be returned.
Of course, you can use it to face some improvised expense, or buy a good without having to wait to meet savings, but keep in mind that if what you acquire is not paid in installments, that money will carry associated interest for which You must also respond.
Do you really need it?
You may want a credit card just in case, or because your acquaintances have one (or more than one), but the ideal is to have a clear purpose with it. Take advantage of discounts in a store that you frequent or to buy that ticket or product that you cannot buy without the card.
It is not advisable to accept a card if you are not really going to use it, but neither is it when it is your salvation and you are going to use it to the fullest and you are going to end up in worse debt than, perhaps, you already were.
Do you have income to vouch for it?
If you don’t have a stable income, you don’t have a job that allows you to cover the monthly installments of your new card, don’t take it out. If your intention is to use it as a means of deferred payment, can you respond without problems for interest?
In case of not having or losing your job, do you have an emergency fund that allows you to meet the payments without problems?
In conclusion, if you are not sure how you are going to pay for the money that you are going to use, and that it is not yours, do not use it.
How good is it?
Paying on time is very important. If you have more debt and you’re having a hard time paying it off, it’s not a good idea to put pressure on yourself with a credit card, which is ultimately just another debt.
Additionally, if you know a card will be tempting you to go out of your budget and spend more than you have (remember that the value they lend you is not necessarily your actual borrowing capacity) you should reconsider your application and be honest with yourself.
Are they clear about the benefits/costs of that card?
Ask before deciding on one card or another what they offer you and how much it will cost.
Credit cards can have additional benefits, such as miles, discounts, points, among others, choose the one that is useful for you. Of course, before you must take into account key aspects such as: will you have to pay any monthly or annual fee for the maintenance of your card? If you make your purchases in installments, you will be charged interest. Do you know what the interest rate is? Of course, you have to compare between several entities and look for the best option.
Analyze all these points, if the answers are positive, credit cards will help and make your life easier. On the contrary, if after evaluating the questions you think that this is not the time, it is better to be honest than to earn yourself another headache, and make the request when either the situation or your financial habits improve. In any case, the more information you have about the card you are going to request, the better; As we told you, it is a good product, but it brings some risks to your pocket if it is handled improperly.
