Many times, we think of wrong solutions to resolve our financial problems and it is not because they are bad ideas at all, such as shopping around for payday loans as an example, but wrong from the approach that we forget to take into account other factors that may lead us to getting into debt. If you are about to make a financial decision aimed to resolve your money problems, keep in mind the following situations that could reflect a wrong move that you are still on time to avoid.
Keep an Eye on Your Credit Cards
Credit cards are one of the most practical financial instruments that you can use to manage your finances, but also those that you should handle with care. The credit limit assigned to your credit cards is not extra money that you can use indiscriminately, but borrowed money that you will have to repay. However, your credit cards can get you into debt if you do not repay them timely, as the charge for the default payment is even higher than the interest rate that your credit issuer has set.
Payday Loans May Turn Into a Debt Trap
Although, payday loans have been designed to bridge the gap between paydays, they may get you into debt in no time. It is easy to apply for a payday loan and the application process is truly fast because they do not rely on a credit history check but in your next paycheck. Failure to repay payday loans timely increases your debt, as these short terms loans, like small loans.net, are the financial product with the highest interest rate.
Spending Money with No Sense
Opposed to payday loans, you may wait until the payday to get your paycheck, but equally you can get into debt if you do you have the habit to create a budget and simply spend your money as you please, without even saving some for an emergency or unexpected expense. When you do this, spending your money as it comes, you may find yourself needing to borrow money and applying for credits that you might not be able to repay.
Debt Consolidation is Not Always the Right Solution
When you are aware that you are already at risk to falling into debt that you may not be able repay, the solutions seems to come from the hand of debt consolidation. Despite this is a good financial move to pay back the money you owe, it is not really when you keep in mind that consolidating your debt means you put all the money that you have borrowed into a single account for a single monthly payment that could be too high to be pay it timely.
Do Not Play With Your Patrimony
When payday loans or any other of the above money solutions are not on your mind, you might think of borrowing money from your valuables, your car, or your home, which is not only a wrong financial move that may get you into debt, but a way to lose your patrimony and the tranquility of your family.
No matter how well you are in handling your budget or how wise you are in spending your money, we will all came to a point that we will borrow money from someone else (either from our relatives, friends or even in a lending company) due to some unexpected expenses including sudden hospitalization bills or other unexpected expenses . Lucky you if you have good enough savings in your bank. I used to borrow money through the help of a lending company whenever I run out of budget and to cover the rest of my expenses for the rest of the month. But of course, you have to keep in mind that borrowing money follows a responsibility. You need to pay your debts on time or else you will end up having a bad credit history. And if you have a bad credit record, then chances are you will have a hard time applying for another loan.
Luckily, we now have installment loans for bad credit which will obviously give you a chance to lend money despite of your bad credit history. These kinds of installment loans are very ideal for emergency situations. And since this is a short term type of loan and payments are done per installment, you will never experience any difficulties in paying your debts on time unless you really don’t know how to budget your money wisely. Of course, as much as possible, we do not want to have any bad credit history in our account so if you’re planning to get a loan, better pay them on time.