The 5 Times It’s Okay To Say Yes To Debt

We’re getting to the time of year where people are spending more money than they do for the rest of the months ahead. Gifts, food, decorations, travelling to see family – it all adds up around Christmas time. One thing you find in your mailbox at this time of year, is junk mail offer after junk mail offer bombarding you with the latest and greatest in credit cards and payday loans. Companies like you to spend your cash, and they use Christmas as a way to tempt you in. They dangle a carrot of low interest rates, extra bonuses and introductory discounts that sway your panicked mind into debt at the time of year where you shouldn’t be getting into debt. A lot of the offers on the table can be very enticing, and when you have things to buy and food to put on the table, it can be very tempting to just say yes and deal with the consequences in the new year.

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Obviously, the last thing you want to do is start checking out all of the offers in front of you, as the footprints left on your credit file can cause a lot of issues for you in future when it comes to getting the credit you actually need. The thing is, there are times where you should be holding out both hands and nodding enthusiastically at the credit in front of you. Sometimes, it is absolutely okay to say yes to debts, and you have to look at it as if you are saying yes to an opportunity in your future relationship with credit. So, when is it okay to say yes to more debt?

It’s Okay When…

Say yes to new lines of credit when you are already carrying a large debt load. Having a credit card balance follow you around from month to month isn’t always easy to deal with, especially when you notice the interest rates are racking up. It can be to your benefit to apply for a new card with a lower interest rate. There are certain cards, like the Target redcard and other store cards that are a great idea for savings through the year and while you’re shopping, but the best cards to get are those with a 0% offer, even a temporary one. You can make the most of the period of lower interest available to you but do be careful. A lot of credit cards will charge you a fee for a balance transfer, which is what you would be doing by getting a new card. Read the small print carefully and make an informed, balanced decision.

It’s Okay When…

Say yes to new credit, when your current minimums that you are paying are sky high. Some cards out there require a minimum payment that may be a little too much for you to handle. Your budget should be healthy enough each month to afford the minimums, and if these are too high, you should be looking for cards with better offers.

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It’s Okay When…

You should always say yes to new credit if the rewards outweigh the problems! There are several credit cards out there on the market that give you great rates of insurance and travel, and if you have a huge amount of wanderlust in your heart, you need a card that offers you money off and discounts for travel. A lot of hotel chains, car chains, restaurants and airlines affiliate themselves with credit card companies so that you can take advantage of the rewards involved. If you’re going to save money with getting credit, you’re going to be better off.

It’s Okay When…

If you make the decision to rent property and not buy, then you’re okay to say yes to new credit. Applying for more credit does have an effect on your credit score for up to a year after you apply – even if you are declined. If you don’t need to extend your mortgage, or you aren’t planning to get a mortgage at all, then you can be safe in the knowledge that your home won’t be affected by your credit decisions. All you need to make sure is that you don’t apply for too many at once.

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It’s Okay When…

You want to make improvements on your credit score? Then it’s okay to say yes. We know, it’s contradictory, seeing as we’ve said twice already that your applications can affect your score! Each application affects your score, yes, but if you have credit that isn’t being used, your score can go back up again. You need to assess whether you want more credit, or you just want a better chance at a higher credit score. Once you’ve ascertained this, you can move forward and make an application for the right reasons, knowing you are making improvements on your credit score that you could need later on.

Christmas is never a time for indulging in payday loans and getting into debt, this much is true, but getting a credit card or a store card for rewards and points makes sense! It makes sense to rack up points and spend them on the right things each year. It also makes sense to have a card with a cash back option or a chargeback option so that you can earn money from your spending. As with most things in life, your credit is going to be about balance, moderation and discipline. If you know you’re the sort of person who will spend through the card at a rapid rate, it doesn’t make sense to apply for one. Credit cards and store cards can be excellent tools for your finances and can really help to mature your financial future, only if you use them properly. So, you’re not really saying yes to debt, you’re saying yes to your financial freedom. You just have to look upon it as an opportunity to do better for yourself as the years go on.

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