Credit cards are a pretty important piece of the personal finance pie. Whether you decide to carry them or not, you have to admit that they have a time and a place. Can they be misused? Sure they can. However, what you’ll often find is that they are just a tool — it’s what you do with them that really make all of the difference. You might think that you just want to skip over credit cards, but before you do that — at least look around a little for one with a good interest rate.
Cash is truly the best strategy, but how many people really have a comfortable cushion to fall back on? The challenges of life often take away the cash stores that we were hoping to use in the first place. This can be a bad thing when everything starts piling up. You’re going to have to make sure that you focus on budgeting, but there is something to be said about making sure that you could get yourself out of an emergency if you really needed to.
Cash loans are great, but you don’t want to get too caught up in those. The interest rate for cash loans is far higher than any credit card. So if you were looking for a way to just cover emergencies, going with a good credit card would definitely be the best way to go. It’s just a matter of thinking about the interest rate.
The winter rate matters so much when it comes to credit cards, because you really don’t want to give the credit card company money that is only going to their profit base. It’s not going to address the principal balance that you charged to the credit card. Really, credit cards are a way for you to get some short term funds, but you will have to pay them back. Credit cards tend to only spiral out of control when you start buying more than what you can pay back.
That’s a dangerous spiral, and it’s not one that you should get into. A lot of people have gone into debt that way.
It would be better to think in terms of getting the best interest rate for your current financial situation. If you have current credit challenges, you will find that you just can’t get a good credit card without paying a little more in terms of interest rate. It is a matter of comparison shopping until you find what you’re trying to get.
The right path that really will make the difference is low interest rate credit cards. But what if you need a credit card and you have to take that high interest rate? Is it better to skip it altogether? Not really — you can still use it as an emergency card. And if you’re a traveler, you’ll find booking reservations and handling car hires to be much easier with a credit card. Also, if your credit card is ever lost or stolen, it’s easier to cancel it temporarily and fight the charges. With a bank card, it’s your money that they’re stealing, and it means that it can take some time and paperwork in order to get it all back. That can be downright frustrating, and there’s no need to think that you have to go through all of that when there are other paths you can take.
Going back to the fundamentals of personal finance is a universal thing – you don’t have to be in the UK to appreciate it. But since you’re a UK consumer, keeping your credit principles in line will lead to bigger and brighter opportunities — it’s only a matter of time!