12:32 17 December 2014
How important is using a credit card? Most people will by all means avoid using credit cards and pay cash so that they do not get into debts. However, this might later bring problems anytime they need to take a mortgage or a loan from a bank. It is very healthy to borrow wisely and ensuring that you pay off all your debts in time. This creates a good borrowing record, which will prove to any loan provider that you are a trustworthy borrower and you will definitely return the cash as you have been doing before with your credit card debts.
It is surprising today that most people always dig back to your credit history and make decisions depending on it. If you do not have any borrowing history, how can they be sure that you will pay on time every time? But how certain can they be of your capacity to repay all your debt in time? Therefore, it is good to have loans and credit card debts. The only thing that you have to do is deal with these debts intelligently by always paying them off when they are payable and also not exceeding beyond your borrowing limit.
Although credit cards are important in ensuring that you secure a loan or a mortgage, they can also kill this dream as well. Anytime you make use of your card and do not pay off your debt, it will still be reflected in your card history.
This will brand you as a person who does not pay loans and you may end up being denied a loan sometime when a crucial need arises.
Although at times it is difficult to clear all your debts, make sure that at least you clear the card with the highest borrowing rate. Delayed payments are common and a reference to one or two of these might not necessarily affect you that much. However, make sure you pay off all debts by the dates agreed on.