getting a credit card
The Battle Between A Credit Card And A Personal Loan
People may think that obtaining a personal loan, and getting a credit card, are quite similar things. It could be seen this way, as you are loaning money out from a lender in order to purchase things you would not have been able to with your own funds. This is not necessarily true, however, as the two can be seen as being quite different from each other.
First of all, many people take out credit cards even if they are financially stable. Having a credit card can be very useful with regards to hiring a car, and putting large deposits down for certain things that you may be purchasing or lending. The bookings for many hotels, airlines and car rental companies require a credit card. If you have a credit card, you will be able to shop online. Most Online stores dont allow purchases from thier store without a credit card. In this respect, life without one can be limiting!
Many people will also get a credit card if they are not financially able to afford all the extra things per month that they would like. It can be very depressing to live hand in mouth, or paycheck to paycheck. If your monthly salary is only just covering your bills, then you will not have any money left over for anything else you may need. With a credit card, you are able to make immediate purchases on the items you really need, allowing you to pay the amount back over a few months and sometimes even years. This is especially useful if you need to buy something that is quite costly, as you will be able to pay it off in much smaller amounts each month. Mnay people love the freedom of having a credit card. That way, they know that should any unexpected expenses come up, they will have a tool in hand to cover that cost.
In contrast to the permanency of a credit card, and the funds that it makes available you on a regular basis; a personal loan is a once off cash injection. A lot of people take out personal loans for specific reasons, such as needing money for a wedding, or home improvements. Once the money from the loan is spent, then the person has to repay the loan over a period of time.
This brings about the debate on which lending facility is most ideal. Firstly, we cant deny the fact that a credit card provides us with constant financial security as it is there as a backup whenevr cash is not available. This makes it a more long term lending facility, and one which also requires discipline. On the other hand, when you obtain a personal loan, you will usually have a good idea of what you need the money for. This will require less discipline, as you will know that once you have spent all the money on what you need, you will not be tempted to chalk up any more credit. Most people take out personal loans with the intention of paying off and settling their debt, even their credit card debt!
There is no better way of loaning money, whether it be on a credit card or with personal loans. If you are able to spend responsibly on your credit card, and only when absolutely necessary, then it will not hurt to have one. Try and keep your outstanding balance as low as possible, and, whenever possible, try to keep your credit card fully paid up, so that you owe nothing on it at all. This will aid you in acquiring a good credit rating. If you have an idea of your purchase, wedding, education or home improvements, then maybe a personal loan is just for you. This way you will not be tempted to spend money on credit every month, but rather, you will budget for what you need to spend your personal loan money on.
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Questions about getting a credit card for the first time.?
I am considering getting a credit card for the first time. I have bad credit, so am considering getting one to help build good credit. USAA is offering a card with 9.9% APR is that good, or too high. Any advice would be greatly appreciated. Thank You.
That is a very good rate for anyone with bad credit.
Whatever card you get, use it for everyday things you would normally pay cash for and pay it off in full before the due date.
This will establish your payment history and keep you from paying any interest.