Applying for a bank loan allows you to have large sums of money in moments to be able to make large purchases, just by meeting the requirements demanded by the bank. However, we also use credit for small purchases when we make use of credit cards, and sometimes we do not stop to think about the interest we are paying. Therefore, is it wise to apply for credit or use credit cards for anything?
Credit cards undoubtedly offer the benefit of accessing products and services without paying them in cash. But there are certain purchases for which it is not wise to use them. In the case of bank loans, you must take into account the type of purpose for which you need it, if it would be preferable to wait and save to acquire it, and if you would be able to pay it once approved. We invite you to take this little test and check how addicted you are to credits.
Would you apply for a loan to buy an appliance, furniture or other household items?
The credit will allow you to make use of the good while you pay it. But the key question is if it really is a basic necessity item, or if it is simply a whim that can wait as you want to change your old TV for a more modern one. Evaluate your priorities.
Would you request a cash advance to buy food?
- Advances allow you to access money from your credit card limit in cash through ATMs, it is very simple. But did you know that the interest for this operation can exceed 85% in most banks? It is not advisable to request this type of credit to buy something you use and it will instantly disappear.
If you do not have money to do the grocery shopping, it is preferable that you use the credit card directly and pay it almost in full, or if you can pay it all, at the end of the month. In this way, you avoid the interest on the debt and postpone the purchase payment for a few days.
Would you apply for a loan to buy a house, a vehicle or pay for your university education?
Buying a house or a car at the cost of only savings is quite difficult. So accessing a loan for this type of property is a good option. In the same way, paying for your higher education with a loan is an investment in your future.
Would you use the credit card to buy something on sale?
If you need it, you were thinking of buying it anyway, you got it on sale, and you only have credit, it is wise to buy it. This way, you save on the offer and you can pay the card on the expiration date.
Would you apply for a loan if you couldn’t save money to buy something?
- If you cannot save a specific amount of your monthly salary to complete a project, you probably cannot pay that same amount in credit installments. However, it has been seen that many find it easier to pay a fee for being an obligation than to save that same amount of money voluntarily.
In summary, before requesting a loan, evaluate the term for which you will be in debt, and if it is a good decision, or what you want to buy, you can wait for yourself to save. And in the case of credit cards, limit certain consumptions and try to pay high amounts at the end of the month, so you will pay less interest.