Credit cards and loans are amazing tools for consumers to have under their belts. However, people still have to use them wisely to get their full benefits. The following are some good and bad ways to use available credit or loans and some information on how to use it wisely instead.
How Credit Cards and Cash Advances Work
Credit card lenders usually give their cardholders a credit limit that they feel is sufficient. The cardholder then shows that he or she can use the money wisely and pay back the funds in a timely fashion. The cardholder can receive regular increases to that credit line after six to 12 months of timely payments and smart usage. Credit card accounts revolve, so the available credit returns to the cardholder rather quickly.
A cash advance is completely different from a credit card. A consumer applies for a check advance online and does not necessarily have to have good credit to obtain approval. The lender deducts the loan proceeds from the person’s bank account at the agreed upon repayment date. Advances do not revolve, but they can give the borrower a good chance of getting an advance in the future. (more…)