Credit card companies thrive because lines of credit offer convenient spending power. Online cash advances thrive because people with poor credit need a fast loan. Both financial options are helpful, but their overuse or misuse tends to create financial difficulties for many customers. Where cash advances are short-term loans with fast payoffs, a credit card offers a bit of relief in terms of payoff, but they can get just as expensive when the debt is left unpaid over the long-term.
Seriously think about cash advances and the payoff before you take out the loans.
Since credit card debt has burdened more households than debt from cash advances, it is good to understand the pros and cons of using them. Having credit cards will strengthen a credit score, but only when they are used appropriately. A cash advance will not. Here are some reasons to argue why credit cards should be used:
- They are convenient. Major credit cards are accepted all over the world and are more compact than a stack of bills.
- They bring peace of mind to have available credit. If you lose your wallet the cash is gone, but credit remains.
- Monthly statements help to keep track of expenses.
- There is an added layer of protection on purchases made by credit cards. Know your creditor’s protection policies.
- Many offer free insurances against purchases and/or car rentals when the card is used for payment.
- Helps to build a credit history when managed properly.
- Many cards offer rewards earned with purchases.
Mismanaged credit card accounts can land a person in serious debt. If you even think you may be prone to this familiarize yourself with one of the cons of using credit cards. You may then want to reconsider having them or have someone help you manage them.
- Are you an impulsive shopper? A credit card may not be beneficial for you.
- Will you not pay them off each month? Keeping debt for the long-term will waste your income on interest. A credit card may not demand full payoff like a cash advance, but it is a great way to keep your income to yourself over the short-term.
- If you feel that having credit is morally wrong, you probably don’t want to get yourself involved with the possibility of having debt.
- With credit come rules. Break terms and conditions and you will only waste your income on penalty fees.
There are many folks who live in denial in reference to their money and how they spend it. Ask some people how much debt they carry and they may not know the answer. The realistic approach to finances not only will help keep the budget organized, but will also help to alleviate unnecessary spending. The last thing anyone wants to have a credit card for convenience or as a way out of an emergency and end up owing thousands of dollars with interest. If you don’t need to use cash advances, then you shouldn’t use them. The short term and high interest will lessen their emergency practicality. A credit card has many advantages, but if not handled correctly, the problems can be that much worse. Watch your debt. It is a realistic picture of your financial future.
