Posts Tagged ‘Pros And Cons’
How Can Credit Cards Hurt Me?
I’ll start off by explaining just how credit cards work. Whenever you make a purchase with a credit card you are borrowing and spending the credit card company’s money. For your credit card you are allotted a total amount to spend. Depending on your credit history, income and ability to pay it can range from $100 and over $100,000. The credit card company will tally up your spending’s and add that to your total balance. Each 20-30 days you will be required to pay back a certain amount of that total along with interest. If you are able to pay the amount in full you may do so but they will set a minimum amount for you to pay. When the balance isn’t fully paid, the interest rate set for the card will be then applied to that amount and added to the total balance. The interest rate set for each credit card will vary for each person. Before credit card companies approve the card they will look at one’s credit score, employment, income, ability to make payments, etc. There are times when credit card companies are releasing a new credit card along with a very good interest rate as a promotion.
People can’t go shopping without their cards. One of the more handy ways to shop is with your credit card. Whenever people dine or shop credit cards are becoming the payment method of choice. Credit cards are easy, common and convenient to use, they fit inside of your wallet and can go anywhere you can go. With today’s fast paced world of spending no one should leave home without their credit card. Today I am going to tell you some of the many pros and cons of credit card use and how to go about getting a great credit card with a low interest rate.
Check Credit Card APR (look for 0 Credit Card APR)
Now that you know what a credit card is and how they work you should know some of the benefits of having a credit card. Credit cards can come in handy in a bind. There are times when you have run out of money. Carrying credit cards takes the worry off of not having cash at that minute. You can withdraw cash from an ATM and most stores anywhere accept all kinds of credit cards.
Having a credit card really frees up a lot of hassle and makes life so convenient but make sure to only use your credit card when necessary and not swipe on impulse. Credit cards can be very dangerous to those who do not have much experience or are not so creditworthy. Take the advice to heart and apply it towards the attainment of your next or 1st credit card. Be responsible and spend wisely.
Do not fall trap to racking up payments from having high credit card debt. First, look for 0 credit card interest rates and keep track of how much you spend daily, weekly and monthly. As I said before, different credit card companies offer different interest rates based on certain factors. The key factor in helping credit card companies determine your annual percentage rate for your card is the history of your credit. If your credit record has several late payments they will not even issue you a credit card or set the highest interest rate if you were to receive one. On the other hand if you have always paid on time and never missed a payment your credit history is blemish free and you will be rewarded with not only an approval for a credit card but the lowest annual percentage rate that they allow. Also take the time to compare credit cards because some issuers may be more lenient than other issuers when looking at your credit history. Low APR credit card rates are presented to you on these sites for you to go over in detail. Before choosing a credit card to apply for you also can check your credit report and score at the credit card comparison sites as well.
No matter how convenient swiping credit cards are there are drawbacks to having them. Using credit cards can be good and bad. They may buy you some time with large rush purchases, but let’s say that after you bought a new computer you never got around to paying the credit company back. Interest amounts on top of the required payment can really add up over a short amount of time. By making the minimum required payment every time it could take years to pay off the entire amount if you don’t spend any more.
What Are The Pros And Cons of a Mortgage Refinance Loan
When you refinance your mortgage you are replacing it with a new mortgage loan. As with most things, a refinance mortgage loan offers pros and cons, benefits and drawbacks.While there are many pros to refinancing your loan, you will probably be considering refinancing because you will save money by refinancing into a lower rate mortgage loan.
Since there is a lengthy application for a mortgage refinance (just like the one you went through for your original mortgage) you need to balance the pros and cons to make an informed decision if mortgage refinancing is right for you.
Because of this application and the fees involved, you have to carefully decide if you really want to go through everything associated with a mortgage refinance.
There are many possible pros and reasons why you may want to refinance your existing home loan into a new loan.
What are the Pros of Mortgage Refinancing?
- Refinance into a low rate mortgage loan. Interest rates for mortgage loans are always changing and so interest rates may one day be much lower than the rates you are locked into with your mortgage you already possess. The interest rate is a major factor in the dollar amount of your loan and the length of the life of the loan.
- If you are locked into an ARM (Adjustable Rate Mortgage) loan and you know that the interest rates are going to rise you can refinance your loan to a low rate, non-adjustable interest rate.
- Avoid paying a higher rate if you have an Adjustable Rate Mortgage and you know that interest rates are going to rise
- If you want to build equity as fast as possible you can refinance your loan into a mortgage loan with higher monthly payments and a shorter loan life.
- Raise money for your own use. You can make home improvements (which will increase the value of your home), you can buy a needed car, you can start a business or raise funds for your business, or take a trip with your family.
If you previously had a bad credit score and you couldn’t qualify for a mortgage home loan with a decent interest rate and you have now worked to improve your credit it is possible for you to get a better interest rate on a loan.
As with everything, there are also drawbacks to refinancing your mortgage so you need to take them into consideration and balance the pros and cons of everything involved when it comes to mortgage refinance.
What are the cons of a Refinancing Mortgage Loan?
- You will lose the seniority of your mortgage. As your mortgage ages, more and more of your monthly payment is applied to building equity; at the beginning of your mortgage, your mortgage payments are paying off interest and not building you as much equity. If you refinance your mortgage you will lose any seniority years you gained towards your mortgage payment going to building equity and not paying off interest, and you will have to start all over again, with more of your payment going towards interest and not equity.
- If you’ve had a mortgage for a long time, you should probably not refinance your home’s mortgage loan. As your mortgage ages more and more of your payment goes towards building equity in your property. If you refinance you will start all over again with your mortgage loan and more of your payment will go towards paying interest again.
- The costs and headaches of refinancing a mortgage may not outweigh the savings you will achieve if you know or think you may be moving in the next few years.
- You may have to pay fees and penalties to cancel your existing mortgage loan. However, if you are refinancing with the same lender you may be able to get these fees waived or heavily reduced.
If after weighing all the benefits and drawbacks to a mortgage loan refinancing option you decide a mortgage refinance is for you then please visit us (links below) for more information.