These Tips Will Help You Avoid Getting Into Trouble With Your Credit Card

Owing a large amount of debt on a credit card can feel like quicksand, the longer you sit still the deeper you slide into a bottomless hole. Honestly, using a credit card shouldn’t leave you feeling bogged down, but it’s important to realize that there are responsible and irresponsible ways to use a credit card. Here are four tips you should follow to keep your credit card debt free and safe.

 

Don’t charge frivolous items to credit

 

Have you ever seen an amazing pair of sunglasses at a store that you didn’t need but still wanted?

Well, you might be tempted to charge those sunglasses to your credit card, however, you shouldn’t, as charging frivolous expenditures to your credit card could leave you with unmanageable debt. Your credit card should be available when you really need it, such as paying for the tow truck after your car battery dies, or when you need to pay an outstanding electricity bill. Buying luxury items on credit could leave you with a mountain of unnecessary, interest collecting debt.

 

Pay more than the minimum each month

 

You used your credit card only for emergency expenses, but now the bill is here, and you aren’t sure how much you should pay. You might be tempted to only pay the minimum, and use the extra money to buy those sunglasses, but the reality is that paying only the minimum you owe will end up costing you more money because of the incurring interest. Aim to pay the full balance you owe every month, and you can avoid ever playing catch up with interest again.

 

Don’t miss a payment

 

You try to be responsible, and pay the full amount each month, however, if one month you can’t afford the full payment, then you might be tempted to skip the payment, and try to catch up next month, but this isn’t something you should consider doing. The consequences of skipping a payment could be a damaged credit score, a late fee on top of your monthly bill, and an increased interest rate. If you can’t make the full payment, then be sure to try to pay at least the minimum as the consequences for missing a credit card payment can be catastrophic.

 

Watch out for credit card fraud

 

Credit card fraud affects millions of people each year, and everyone is a potential victim. With people using their credit cards more often, it can be convenient to reach for the plastic and type or swipe almost anywhere, but this is something you should avoid doing flippantly. How and where you use your credit card matters, so be careful to guard yourself against credit card fraud. There are many steps you can take to prevent credit card fraud:

  • Keep your credit cards secure on you at all times.
  • Choosing a bank that also allows foreign payment, like mach, the best bank in Malaysia.
  • Only use your credit card in places you trust.
  • Destroy any documents that reveal information about your credit card.
  • Set up a push notification system on your smartphone to alert you when your credit card is being used.

Which is the best option: Private lending or Real estate crowdfunding

You need to have a properly researched plan for raising capital for your real estate project to make it a success. When it comes to financing your real estate project, you can either go for. Private lending or Crowdfunding. So, this article will explain which way should you go for:

Private lending:

In the case of private lending, you take the loan from a high-net-worth private party to raise capital for your real estate project. They charge a very high rate of interest in comparison to banks. Also, the amount of loan you can raise and the interest on the loan also depends on your credibility on the market. Private lenders usually have some staff to help you during the project.

Real estate crowdfunding:

This is the entirely a new concept of lending money for a real estate project wherein multiple investors contribute money for a single loan and share the profits in the ratio of the amount contributed by each one of them.

In this case, crowdfunding companies invite multiple investors to lend money together to a single project. So, if you need the money for your project, you can go to a crowdfunding company and submit the details of their project with them. Once the project is approved by the company, they list it on their website inviting funding so that whosoever is interested in investing in the project can pool in the money with other investors. The money is raised in just a matter of days under crowdfunding.

Some of the crowdfunding companies offer loan at specified rate of interest for all the projects whereas some of them charge a different rate of interest depending upon the risk involved.

Which one to choose:

In most of the cases, it is witnessed that the default rate of interest on the finances raised through crowdfunding is higher than the direct lenders. The rates of interest in the case of crowdfunding are generally higher due to lack of support in times of trouble. When there is any problem faced by you after closing the deal in crowdfunding model, there is no way to work things up with the investors. But, you can contact the private lender any time you want in case of any issue.

Throughout the project, you might have hundreds of questions regarding appraisals, legal issues, etc. that need to be answered. In this case, private lenders are just a phone call away to answer all your queries and provide all their support for successful completion of the project. Even though crowdfunding will help you raise money quickly and simply, but you cannot expect such support from them in future.

In case you need more money for your project, then you can easily reach out to the private lender and make him understand your situation in comparison to the crowdfunding investor.

Private lending is a much better option of funding than crowdfunding. You can build a long-term relationship with a private lender whereas, in the case of crowdfunding, the investor does not even know whom they are investing for.