Does a cash advance online qualify as bad credit or good credit? Is it credit at all since it does not get registered onto your credit history unless it becomes a default loan? There are many people who will argue that a short-term cash advance is bad no matter it is counted as credit or not. Ask a lender and some will say it is great. A responsible one would tell you that it depends on how it is used and paid off.
A cash advance online is an opportunity to get some fast cash during a financial crisis in order to save from being late or overdrawn. It is a way to get a car out of the shop or to help with the co-pay for an unexpected trip to the doctor. It is definitely categorized as bad debt if the loan is not paid back in full plus fees on the original due date. Credit card debt is also bad debt. Anything that you owe money towards but does not give you equity in return for what you have paid in is considered bad debt.
Cash advances are recommended for emergencies only.
When you buy a home you have scheduled yourself debt for many years As you pay off the loan, the value of your home minus what is left for debt is your equity. As you pay down your loan the value of your purchase goes up. This is good major debt. You could consider a car loan good debt as well. There is some depreciation, but if you haven’t run the vehicle down into the ground, there is resale value.
Investment loans are also example of good debt as long as the investment performs well. If it fails or does poorly, there is no return on the investment leaving the borrower with payments.
You probably would not go to a financial adviser to talk about cash advance or credit card debt, but you will benefit from talking to one about major debt, investment debt or business debt. An adviser will help you to make the most out of your investment, minimize tax liabilities on the investment and structure your financial portfolio to maximize future earnings.
Protecting your future finances is an important strategy to take if you plan on retiring someday. Educating yourself on money matters, financial institutions, and services provided is the first step to making your money work for you. If you are not savvy with money, investments and balancing good and bad debt then it would benefit you to make an appointment with a financial adviser.
Good and bad debt is a balancing act. People who live paycheck to paycheck are less worried about future money or investments and are more worried about food on the table and utilities kept on. Those who live off of credit cards and cash advances end up sinking further into bad debt. The struggle is draining but it is also doable with a good plan of action and the determination to stick with it.
