Credit Card Debt – Black is the New Green

Oct 21, 2014 Blog  Personal Finance

There are many things in life that we have love-hate relationships with. One of the best examples out there is credit card debt, or credit in general. We love to have that divine piece of plastic right there in the moment of that exciting, new purchase but hate coming to terms with the aftermath of repayments.

After inevitably entering the tempting world of consumerism, it’s extremely hard not to fall prey to ever-changing fashion trends, the latest home décor must-have or BMW’s shiny, new release. Having that credit card handy is an easy way to spend money we don’t have and, often, the satisfaction of keeping up a certain social status far outweighs the importance of making those dreaded monthly repayments.

With all this being said, having a good credit record is something we all need eventually, whether you’re a student, a parent or a business owner. It has become a way to measure “financial health”. It is how all South Africans are weighed when we take out personal loans and to make large purchases such as houses and cars, not to mention emergency situations. A good credit report extends beyond purchases, too, in that it may play in your favour when it comes to selection processes for renting an apartment or securing that dream job.

It’s good to have credit, yes, but within reason. The only way to build a good credit history is to use it as wisely as you can. The idea here is not to live beyond your means. Setting a monthly budget and sticking to it is one way of keeping yourself in the black.

Doing the necessary research and “shopping around” for low interest rates is another way to ensure you don’t further damage your financial welfare. Pay your bills on time! They say an elephant never forgets – your credit score definitely won’t. If you make late payments, this could indicate a trend and cause financial institutions to begin to doubt your ability to pay your debts.

There are other ways to keep yourself out of the red. Look into alternative financing options such as a peer-to-peer lending service like RainFin. RainFin’s aim is to take the mystery out of financial lending and loaning, making it as transparent as possible. Depending on your risk, you are able to enjoy interest rates that are lower than the average credit card or personal loan. Apart from saving money on this level, RainFin also ensures that you save on a monthly basis AND over 12 or 24-month term. This new and innovative type of loaning system could be the answer you were looking – why not sign up and see how much money you could save month to month?

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