Banks offer us many different loans. Some of them are more popular, others a bit less. We can definitely credit a credit card for these loan products, which we reach for quite often. “Plastic money”, is increasingly found in our portfolios, and transactions carried out with the help of a loan are constantly increasing. But we often apply for a credit card no matter what we want to spend the money on. And this is a big mistake, because through this our credit becomes expensive and difficult to repay. So let’s think about when we should not apply for a credit card and why.
A credit card is an excellent financial security for specific cases. When we have it in our portfolio, we are sure that when we find ourselves in financial need, we will have additional funds at our disposal. We can then pay for purchases in stationary or online stores or choose money from an ATM. But we must be aware that the credit card is one of the most expensive credit products on the market, so we can not exaggerate using it. Unless we use it only for non-cash transactions and quickly pay off debts, then we do not pay any interest or commission. Therefore, we should not apply for a credit card when we have a plan for what to spend money on. So when we want to make a renovation at home, it will be better if we use a mortgage, if we want to buy a car, request a car loan, if we want to go on vacation and we do not have enough money – use a cash loan. For sure it will be a much cheaper solution for us, and in addition monthly installments are much easier to pay off. We must repay the debts on the credit card after a certain time, and it is not as easy as it seems and you need to have a lot of discipline to pay off your credit every month.
A credit card as a financial security may be a very good solution for us. However, if we want to use it for other purposes, it is not an attractive product at all. Therefore, before we apply for a credit card, let’s analyze whether it will really be the best loan product that we should use in our situation.