Are you taking advantage of loans the right way? If you don’t use credit cards and loans the right way, you can really set yourself back when it comes to your personal finances. You need to know how to handle them correctly, especially with a business and that requires a knowledge base before you ever get started. I have some helpful advice concerning using credit cards and taking advantage of loans the right way.
Are you taking advantage of rewards programs?
If you’re going to get a credit card, or more than one, you need to find one that gives you special benefits. There are reward cards that offer airline miles and cash back, and these are what you need to look at. There are also other kinds of reward cards. I like cash rewards the best, it is basically free money for spending money. Take a look at your options, and find one that is right for you. In order to build your credit properly, you need two major credit cards.
Keep your credit utilization in check
When using your credit cards, you want to make sure that you don’t use more than approximately thirty percent of your total allowable credit. In essence, you should be paying off your balance each month. This will give you the best credit rating, and it will also save you the interest on your credit cards, freeing up you finances and budget. It is easy to get into a situation where you are only paying the minimums, but those interest charges will keep hiking up your principal balance. Do the best you can to stay under that thirty percent mark.
Credit is not extra money, it is leverage
You should never think of your credit cards for cash advances. Why you ask? Cash advances on your credit cards are at an even higher interest rate than you pay for purchases. It is unreal, and you don’t need to take advantage of this trap. You should have the cash to begin with before you ever use a credit card if possible. You should only be paying off the balances to build your credit. If you need a few weeks to come up with the money, that is fine. You pay it by the end of the bill cycle. However, cash advances are taboo. Once you start hitting those higher interest rates, it is harder to get ahead.
Quick loans come with high interest rates
When it comes to loans, you need to make sure you stay away from payday loans. These types of loans seem irresistible to many who are in need of fast cash, and they are a trap. Payday loans offer an interest rate that is so high that they should seriously be considered entrapment. These businesses prey on individuals with less than perfect credit. You are basically throwing your money away. This is the opposite of saving up for an emergency fund, and that is why you should have one.
Find ways to restructure your debt
When you can, you should try and consolidate loans. Credit cards let you consolidate from time to time, and this can be helpful. However, you want to be wary and investigate any balance transfer options before you agree. Also, consolidating student loans is a great option. This can lower your payment and your interest rate, and you can save so much money. Of course, you need to investigate terms as always, but this is usually a good option. Especially if you can get a no or low interest balance transfer. This is advantageous as long as the fees are less than what you would be paying for a higher interest rate over time.
In business take full advantage of loans and credit cards
The use of credit cards and loans is crucial to your financial situation. Credit will allow you to leverage your business to be able to have up front capital to work with by taking advantage of loans and credit cards. You must be responsible, and you must make the right decisions. One bad decision can cost you, so you must make sure you’re always on top of your game when it comes to credit cards and loans.
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