When is there any sense to take a loan from the bank? May a credit card become an additional argument for financial planning? Is it important to avoid borrowing in principle, or is it better to take advantage of the benefits of credit programs? There are so many harsh questions in the modern world of consumerism and here are some answers.
Two Options – Two Approaches
The issue of extra money often comes out when expenses begin to exceed your real income. The most common ways to get a loan is a bank loan or a credit card.
Bank Loan Peculiarities
It’s worth applying for bank loan when you need to get a specific and considerable amount of money immediately, or when you need cash. Repayment of debt and interest is made monthly according to the agreed payment schedule. How much to return and when is stated in advance.
- In the case of a large one-time purchase (for example, a car), it is better to use the bank loan, since the limit on the credit card is hardly enough.
- When calculating cash, it is more convenient to use such a loan. Unlike a credit card, when issuing a loan in the form of cash, there is no commission for withdrawal of cash in an ATM or cashier’s.
- A bank loan can envisage rather long periods of paying bank, f.e. one or more years.
- The interest rate on the loan could be quite lower than the interest for using a credit card.
Credit Card Peculiarities
A credit card is convenient to use when you need to make many or several unscheduled purchases, and in those cases when money from the card will be spent in parts and gradually. Interest on a card loan is not accrued on the whole amount, but only on the part that was used.
- Unlike a bank loan, where the debt arises immediately, a credit card is not a debt and not a liability, as long as it does not provide credit.
- A grace period for repaying a loan is, as a rule, about 55-90 days, during which no interest is accrued on the money withdrawn on credit. Thus, attentive and wise cardholders do not pay interest for the loan at all.
- Abroad it can help when you need additional funds, and do not have enough of your own.
- While paying for goods and services, the bank can charge bonuses and discounts that can be used to purchase goods. This is one of the possibilities of saving with the help of this banking product.
Check and Calculate
Bank loan is a good financial tool that you can use when needed. It’s a great way to buy what you want without the painful expectations of accumulating funds.
There is nothing wrong with using card loan possibilities; moreover it’s possible to do this each month.