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Home » Should You Save Or Get Credit? Here’s The Answer

Should You Save Or Get Credit? Here’s The Answer

January 21, 2021 By The Saving Gal | This article may contain affiliate links. For more information visit our Disclosure

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Should You Save Or Get Credit Here’s The AnswerWhen it comes to your finances, you may find that you just don’t really know where to start with it. You know that you want to be responsible with your money and you want to be in a good financial position – but how do you make that happen. How you spend your money matters here. It’s always important for you to ensure that you’re able to allocate your money in the most suitable way. This is where budgeting comes in. As we all know, saving your money and saving up for the things you want is a good way to be responsible and get to where you want to be. But also, there’s also credit to consider. So which one is best? Let’s take a look.

The Benefit Of Saving

To start with, you may want to seriously consider the benefit of saving. When it comes to your financial situation, saving is always going to be the sensible and responsible choice. If you can, you’re going to want to really work on your financial habits so that you’re saving first and spending second. This is also a more effective way to pay for things as you’re not ever overpaying with an APR.

When Credit Could Work

But there are also instances where you feel like credit might work best. Maybe you have never used credit but you would like a mortgage at some point? Sometimes, mortgage lenders won’t lend to you because you have no profile. So getting a credit card to pay for a bill and paying it off with a direct debit can work here.

Using Credit Responsibly

However, if you are thinking about taking out credit, then this is something that you need to do responsibly. You’ll want to make sure that you are able to pay it off and that you’re not letting your debt get out of control. This can be stressful and actually cost you a lot of money too.

Big Purchases To Save For

Now, when it comes to some big purchases in your life, you might want to be thinking about saving up for them first. Of course, you might want to get loans and credit for things like home renovations and car purchases, but you could also just wait a little longer and save too. When you’re car shopping, with someone like Automax Hyundai, be sure to take a look at their deals, but remember it is cheaper to purchase outright. And it’s the same with your home renovations too.

When Credit Is Required

But then there are those cases where credit is really required and you’ll want to make sure that you’re in a good position to apply. The prime example here is mortgages. Of course, sometimes people can be a cash buyer and that’s fantastic. Yet, the vast majority of us will need to get a mortgage to be able to purchase a home. Once you have secured your down payment, you will then want to make sure that you’re in a position to apply for credit and purchase your home.

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Are you up to your ears in high-rate credit card debt? Don't worry; there is a way out! Here are 7 smart tips for getting out of credit card debt fast. Does the thought of checking out your credit score make you want to scream? Credit cards are a great way to lessen that anxiety. Like all good things though, as quick as it can help, it can also destroy if you don't pay on them. Once you pile on the credit card debt, it can be a challenge to get out. Don't let this discourage you. There are a few ways to save yourself from drowning in numbers. Here are a few tips on getting rid of credit card debt and claiming your life back. 1. Stop Using Your Card If you know for a fact that you have terrible spending habits, hide your card from yourself before you sink too far into the pit. You can cut it up, lock it in a safe and lose the code, package it in duct tape and bury it in the backyard, use a wood chipper, the options are endless as long as it is out of your hands. If you're using it to pay your bills then, try and set up a payment plan with your utility company. Or downgrade your house or car. Fitting your bills into your budget will make you less likely to use your credit card and give you a little breathing room for managing credit card debt. 2. Make a List of All Your Debt Studying your enemy is one of the key factors of defeating it. Tis means you should make a list of all the credit card debt you've currently got under your belt. Making a list will help you figure out which one you should prioritize and pay off first. How do you determine this? Check out the standing of all the existing credit card debt you have and their interest rates. 3. Come up with a Strategy Credit cards can do massive damage to your credit score so you want to pay the one with the highest interest off first. After you've paid off that one, go on to the next one. Eventually, you will pay them all off as you go down the line. Make sure you continue making minimum payments on them after so you don't find yourself drowning again. 4. Try to Get a Lower Interest Rate Not all credit card companies will be agreeable about giving you a lower interest rate, but it never hurts to try for the sake of getting lower payments. Sharpen up your negotiation skills by using any kind of leverage you can to get them to work with you. Bringing up how long you've been with them or your good standing up to this point might get them to budge a bit in your favor. If they are completely unagreeable, then transferring your debt to a new, lower-rate card might be an option, or you can take out a personal loan. Personal loans can be a little harder to get, but you'll find that if you can get one to pay off your debt, the interest rate is usually way lower than your credit card one. Eventually, the loan will replace your credit card debt with an installment loan. Believe it or not, this will actually look better on your credit. To find out more on personal loans you can visit this website. 5. Find a Payment Plan If getting a lower interest rate still doesn't work out for you, then it's time to figure out some other options. The easiest thing you can do is either ask for a deferment or a new payment plan. Credit card companies like money, so they will most likely work with you on this so they don't have a non-paying account in their system. 6. Limit that Spending If you limit your spending, you'll have more money to put toward your credit cards each month. Just think: skipping out on that morning coffee could allow you to pay your debt faster and lower your interest rate. If you want to make a little game out of it you can join spending challenges. This could mean going on a 14-day to a year-long spending ban depending on what's best for you. This is recommended if you just don't trust yourself to stay on budget. If you have self-control, then it's just a matter of keeping up with it and throwing these savings into your loan debt. 7. Put Any Extra Income Towards Credit Card Debt Budgeting can only take you so far so on top of putting any extra savings toward your debt. You can take on little odd jobs for extra money. There most likely a ton of options available for you in your area. You've just got to call around or surf the web to seek them out. Consider turning any kind of hobby into a money-making business. For example, if you know you're a great artist, then you can open yourself up to commissions. You might be surprised at how many people may pay. A Guide to Getting Rid of Credit Card Debt Just because you feel like you've dug your own grave, doesn't mean you have to stay that way. There are ways of getting rid of credit card debt. Come up with a foolproof plan to tackle it, try to find a lower interest rate, ask for a new payment plan, or just take on a few extra odd jobs. Put your credit cards back in your control. If you're new to the credit card world, you could make a lot of mistakes that will put you into debt without even realizing it. Visit our blog for a beginner's guide to credit cards

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