More from onestoploan solution
More in Politics
Related Blogs
Archives
Social Share
Expenses for Which Credit Cards Should Be Used to Fund
Posted By onestoploan solution
Body
The number of credit cards in circulation in the UK has increased, thanks to loyalty points people earn each time when their cards are swiped. As the soaring cost of living continues to bite, many people are showing reliance on credit cards.
According to experts, Credit cards can be used for various purchases, from groceries to large purchases, but if you do not have spending discipline, you need to think hard about whether a credit card is right for you.
More than one-third of people coming for debt advice owe credit card debt. Credit cards are prominently ideal to fund emergency expenses. Still, because of the convenience, people hinge on them for regular living expenses and get stuck in debt that they struggle to turn off.
While you can use credit cards to make large purchases, your budget can blow up if you do not have an instalment payment plan. It can be quite complex to settle the whole cost in one go.
Expenses for which credit cards are ideal to use
Credit cards are not bad, and they should not be deprecated because their wrong use can result in a piling of debt.
For instance, some people use credit cards when they are out of work. At the time of unemployment, you should not use them even for emergencies. If it is too urgent, you should take out loans for bad credit for the unemployed.
Here are some of the expenses for which you should use them, but caution is still needed.
- Groceries
Groceries are the most common expense you can fund with your credit because, not to mention, it helps you avail yourself of cash back and bonus points. Most of the grocery stores take further 5 to 10% of your bill if you swipe your card at the time of checking out.
However, experts suggest that you carefully analyse how much money you would like to spend so you have a budget to pay off the full money when the bill is generated. You can be trapped into spending more than your budget has room to pay off the bill, so make sure you go through the availability of funds.
- Gas
Most of the credit card companies will let you earn rewards when you use your credit card for gas or fuel. In fact, some companies can offer 5% cash back without charging annual fees. 5% ash back does not seem too much, but it is still a significant saving when they are paired with loyalty rewards.
- Vacation and related expenses like airfare
If you are often on the road, you should always use your credit cards to pay for your travelling expenses. Credit cards are the best bet as long as the amount is not too big and your budget will not refuse to pay it off on the due date.
However, if you travel abroad, you should ensure that no fees will be levied because of foreign transactions. Some credit cards may even fund your complimentary travel purchases.
- Larger purchases
Credit cards can be helpful if your budget does not allow you to pay for a gadget or something outright, but remember that you will have to pay off the whole cost in full on the due date. It can be difficult, and on the other hand it does not make sense to make a big purchase using your card when you are already struggling with your repaying capacity.
You should have an instalment credit card that allows you to pay down the debt in fixed instalments over a period of 12 months. If your credit score is up to scratch, you can qualify for a 0% APR promotional period for new purchases. This will let you pay off the debt for a couple of months without paying interest on your purchases. You will be able to spruce up your credit file if you make all payments on time.
- Subscriptions
Monthly subscriptions for Netflix and digital newspapers are not too high, so you can consider using credit cards to pay for them. Paying such a paltry sum in a lump sum on the due date will not be a burden.
To sum up
Credit cards can be used for all aforementioned purchases, but remember that you must have enough money to pay off the full amount on the due date. This is ideal when there is a sudden temporary disruption in cash flow.
Do not bank on these loans if you are unemployed. If you are on benefits and need a loan today, consult a direct lender. Chances are you will pay down money in weekly instalments. For large purchases, you should avoid credit cards if the amount is not to be paid down in instalments. A lump sum payment of a big one-off cost can throw you into a debt trap.
Our Contact Address:
150 Bath Street, Glasgow, United Kingdom
Mobile: +441417690195
Email: info@pmloansday.co.uk
Comments