Credit shopping is the best way to afford big purchases which are usually a big burden on your monthly expenditure. Credit allows you to pay for a big purchase over the course of several weeks, months or even years. With lucrative deals and discounts offered by various online catalogues for credit shopping, most customers tend to prefer this way of shopping. But is credit shopping the ideal way to shop?
Most of them would say yes. Credit cards make it easier to buy things for people who do not like to carry cash with them for safety purposes. Some companies these days do not even accept cash purchases like most airlines, hotels and car rental agencies and so, putting purchases on credit is the best way to make buying things easier.
Most credit card companies will vouch for the fact that a certain purchase has been made even if the original receipt is lost or stolen as the company’s credit card statement will act as evidence to prove the purchase. Moreover, some companies offer insurance on large purchases made using the credit card.
Having a good credit score is always important and making payments regularly and within deadlines helps customers improve their credit rating. Having a stable credit history is very important if there is a need to apply for a loan, renting goods for a period of time and even sometimes for job applications. Hence possessing a good credit history is always an advantage and customers should look towards building a good credit score over a period of time.
Transactions made on credit come most helpful during emergencies (such as a car break down, medical emergency, etc.) when an additional amount of funds is needed to cope with them. Moreover, most credit purchases come with additional benefits like extra discounts on specific brands, cash back offers and redeemable points. Though credit is sometimes intended to make the customer spend more, if used judiciously the benefits are manifold.
All good things aside, there are always two sides to a coin. Credit shopping has its own down sides as well and can have a disastrous effect on future purchases if the customer fails to make regular payments. Many customers fall into the trap of signing up for many weekly/monthly payments as it may seem affordable. This may look like free money, but the payment has to be covered eventually and every extra month adds heavy interest rates to the total.
Defaulting on credit payments not only affects your credit score, it also the leaves the customer open to legal consequences. One aspect that most people do not think about is that all purchases made on credit is simply borrowing from the future and if the customers’ financial situation goes south in the future, they will be saddled with heavy debt and a perennially increasing interest rate.
Purchasing through credit is a double edged sword; it can help you improve your credit score and make big ticket purchases affordable, but it can also land you in significant financial trouble.