When Should I Use A Debit Or a Credit Card?

When-To-Use-and-How-To-Use-a-Debit-Card-vs-Credit-Card.When it comes to your finances, there are a lot of important decisions to make. One of the most crucial is whether you should use a debit or credit card. Both cards have their own advantages and disadvantages, so it can be tough to know which one is right for you. Here’s a look at when you should use each type of card.

When Should I Use a Credit Card? 

It might seem like forever ago, but there was a time when most people used cash for payment. Credit cards are exactly what they sound like- you are borrowing money. As of December 2021, consumer credit increased nearly six percent. With these numbers in mind, it’s still important to utilize proper usage of a credit card to avoid getting into debt. The following situations are recommenced to use a credit card.

  • For traveling- Using a credit card when you travel is ideal because you can freeze your card or dispute fraudulent charges instantly. There are also rewards incentives for people who used credit when they travel.
  • Changing jobs or locations- People starting a new job or moving into a new area often have many expenses. These include paying for a hotel, gas, and food. Using credit can help when you are short at funds at the current moment.

When Should I Use a Debit Card? 

A debit card takes funds directly from your banking account.  It’s similar to paying in cash, except it’s often seen as a more secure payment. You don’t have to worry about carrying around large amounts of money and nearly any business accepts them as a form of payment. Here are some scenarios when it’s better to use a debit card.

  • For emergencies-  Whether it’s a set of new tires that you desperately need or an unexpected hospital bill, a debit card is always the better choice here. It’s recommended to keep at least 1,000 dollars in your emergency fund.
  • When you’re on a strict budget- If you’re watching your money closely, it might be better to use a debit card. Studies have shown that Americans spend less when they only have access to cash, not credit.

Understanding The Difference Between a Debit And a Credit Card

Debit and credit cards are both payment methods that allow consumers to spend money without having to carry cash. But there are some important differences between these two types of cards. A debit card is linked to your checking account, and the funds are transferred immediately when you make a purchase. A credit card, on the other hand, allows you to borrow money from a lender and pay it back over time. Credit cards typically have a higher interest rate than debit cards, so it’s important to be aware of this before you decide which type of card is best for you.



3 Simple Ways to Start Saving Money

3-Simple-Ways-to-Start-Saving-Money.One of the biggest challenges many people face today is how to save money. The cost of living expenses has not gone any lower, and it can be tough to set money aside after settling monthly bills. Additionally, there are the children’s needs to take care of, one of which is their education to ensure a brighter future for them. Rent, utilities, food, and so many more are expenses you cannot take for granted as they are all part and parcel of living a comfortable life.

Just the same, saving money is essential, considering all its proven benefits. It is a habit that everyone should develop, primarily because it provides you and your family with financial protection for any emergencies. Moreover, having money stashed away helps you make significant purchases, keep you away from debt, and make your life much less stressful. Saving is so necessary that children should be taught at a very young age to save. Some parents may even teach their children how to earn their keep, such as recycling discarded items like aluminum cans and getting paid for them by recycling companies such as langleyrecyclingkc.com. Habits like this can teach them the importance of setting money aside for the future.

If you want to learn more about how to start saving money, here are some simple ways to begin.

  1. Start with a budget

Creating a budget is the first step to start saving successfully. A budget allows you to itemize your expenses and find a way to balance your regular costs and savings throughout the year. It also helps you determine your goals and discover how you can achieve them. Begin by checking your credit card and bank statements, receipts, and other bills to identify your usual expenses. From here, you deduct them from your monthly income, including your part-time job, government benefits, etc. Then, if you find you are overspending, see where you can cut back on your spending.

  1. Learn how to economize

Most of the time, people find themselves short of money because of habits they have developed through the years. Impulse buying is something that many of us are guilty of. The simplest way to solve the problem is always to have a list when you go shopping. Avoid spending on items that are not on your shopping list. Turn off appliances, lights, and other electrical equipment when not in use. Electricity bills are some of the most significant monthly expenses in every household. As mentioned earlier, you can also earn money from recycling. Start decluttering and bring discarded aluminum cans to the people or companies that put them to good use, such as langleyrecyclingkc.com. You not only earn money but help the environment and keep your home clutter-free too.

  1. Monitor what you spend

Most people have the mistaken notion that making large purchases is what keeps them from saving. In reality, it is what we spend daily on little things that make us pay much more. Therefore, it is always best to monitor your expenses each day, so you don’t overspend. When you check your bank statement, you can determine what you save and what you spend. The next step is balancing it with your budget, determining if you are still within it, and pinpointing areas where you can cut down.

There is no better time to start saving than now. You never know when you will need money you don’t have.

Image: https://www.pexels.com/photo/person-holding-100-us-dollar-banknotes-2068975/
 Money Saving Tricks for Working Moms

5 Ways to Save Money on Family Expenses

5-Ways-to-Save-Money-on-Family-ExpensesEven though it does not sound even remotely romantic and idyllic, sometimes, you have to run your family like a business. This mostly refers to the way you spend your money because it can all get very overwhelming. Schooling, travel, day to day life, and even living expenses are all a bit too much when combined. This is why we are offering some simple ways on how to save money on family expenses.

Cut on your food expensesOne-of-the-biggest-expenses-is-of-course-learn-to-cut-on-your-food-expenses
One of the biggest expenses is, of course, food! An average family of four spends from $500 to even $800 and $900 on groceries each month. More than half of this is actually groceries you need for meal preps, breakfast, and basic daily needs. However, there are ways you can cut down on food as well. First of all, try buying fresh fruits and vegetables. Not only is it healthier and tastier, but it will also cost less than frozen goods. Another easy tip is to make a list when going grocery shopping and stick to it. This will reduce too much food in your fridge, which may eventually even go bad. Planning your meals ahead, and storing the leftovers for later is another easy trick. One more thing you can do is use coupons, and check the prices in different stores, to see where you can get cheaper items.

You probably think there is no way around banking expenses, credit cards, and loans. However, there is an easy way to save a bit here as well. One thing you should definitely look into is a handy unlimited cash back credit card. It allows returns up to 6% on all of your costs. They mostly include food, travel, gas, and even fashion shopping. Check with your bank which cards give you the option of cashback, and get back a percentage of what you spend in cash. Since we are talking about banking, opening up a savings account, and teaching your children about saving is a good tip. You can also create a monthly budget based on your needs and stick to it.Planning-your-trips-and-booking-early-on-is-a-great-way-to-save-some-money-and-find-cheaper-offersSave money on travel

Travel is one of the most amazing experiences you can have with your family. But, it can be pretty expensive, which is, of course, not a reason to give up because you can save some money without giving up the fun. Planning your trips, and booking early on is a great way to save some money, and find cheaper offers. If possible, being flexible with your travel dates can also save you a lot. Avoid going in peak season, since the prices of accommodation, plane tickets, and even food and drinks are higher. Remember that even the destinations that are not popular can be beautiful, so don’t follow the trends blindly. Another great advice is to plan activities beforehand and try to choose sightseeing, hiking, and many others that don’t require a lot of money.
Monthly household expenses are not a joke. Water, electricity, heating, internet, and many more can take quite a lot of money. When it comes to phone and Internet bills, make sure you choose a deal that suits your needs. Saving on electricity is also easy. Just turn off the appliances and lights when you are not in the room, and if possible, consider getting solar panels. Those are expensive to install, however, future expenses are minimized. Your heating bill can be smaller if you turn down your thermostat by just 1%. It will save you around 10% on your monthly bill.

Another important aspect you should consider is transportation. Opt for a more fuel-efficient car, if public transportation is not a possibility for you. However, if you can use it, book your tickets in advance. Not only will this save you money, but it is more eco-friendly.

Thrift shops and garage salesA-great-way-to-save-money-is-at-Thrift-shops-and-garage-sales

Most people have certain prejudices about second-hand goods when in reality it does not have to be as bad. Buying used books or pieces of furniture is a great place to start. This is a great way to find unique, vintage pieces if that is what you like. Toys, bikes, scooters, and many other fun children’s items can also be bought in thrift shops. As for garage sales, you can both visit and organize those. It is a great way to earn extra money and get rid of the things you don’t use anymore. You can get tools, dishes, and art on such sales, which is a great way to upgrade your house.

Changing your living habits slightly will not make a big difference in your life, however, your wallet will thank you. This way, you can invest in other family necessities, and be more economic along the way.
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Learn How Personal Loan Might Help Your Credit Score in 6 Ways

Learn-How-Personal-Loan-Might-Help-Your-Credit-Score-in-6-WaysDid you know that personal loans can help improve your credit? How can you benefit from personal loans in this regard? Well, let us first understand what credit score is and its relevance. Before a loan application is approved or declined, lenders often conduct credit checks on applicants. An applicant is supposed to meet some requirements in order to be considered for a loan. A credit score is one of the most common eligibility tests that borrowers are often subjected to.

What Is Credit Score?

This is a three-digit figure that was established to determine the creditworthiness of borrowers. It ranges from 300 to 850 points. In general, any score above 800 points is considered excellent. A score of 700 points is good and most lenders will prefer giving loans to you at lower interest rates and better terms. A score that ranges from 650 to 700 points is fair, and even though you can qualify for most loans, your chances are limited compared to someone with good credit. Any score below 650 is bad and your chances of securing loans here are very minimal. Yes, you can qualify for loans but at higher rates.

It is important to note that one can have bad credit not because of defaulting loans, but because of not using credit. Again, it takes time to build credit. Everyone desires to have good credit to qualify for most loans at better rates and terms.

Ways in Which Personal Loans Might Help Your Credit

In light of the above, it is vital to improving your credit score in case it is bad, or to maintain it if it is good or excellent. If you are not careful, your score can plummet with ease and will require a lot of effort and time to establish it. There are different criteria for improving the credit score. The rest of this discussion will illustrate different ways in which personal loans might help you improve your credit score. Let us start.

Earn Points by Borrowing and Repaying in Time

Usually, most lenders report payments to credit rating agencies. According to financial experts, timely payment is a credit factor that accounts for up to 30% of borrowers’ scores. Some lenders offer personal loans even to individuals with bad credit. You may have heard of personal loans for bad credit. This means that if you borrow and repay the loans in time, your score will improve gradually. That is why individuals are often advised to borrow loans and repay them in time while building credit. You have so many borrowing options in this regard. Look at the Best Lowest Payday Loan Singapore and apply it in case you need instant. It can help improve your score.

So, what happens when you don’t repay the loans in time? Notice we said credit agencies use your payment history to compute your score. Therefore, if you do not make payments in time, your score will dip significantly. This is something you should never allow. Lenders are aware there are unforeseen circumstances that happen and render you unable to make a payment in time. Whenever you anticipate this possibility, talk to the lenders in advance. Trust me your payment schedule might be adjusted, though at a fee.

Debt Consolidation 

Debt consolidation is one of the effective strategies individuals use to manage debt. Having a lot of payments every month can actually be overwhelming. Incontrovertible, the chances of forgetting the due dates of payment are quite high in case you have to make a lot of loans to pay. But this is exactly where debt consolidation comes handy. Imagine you are making four different payments every month for your credit cards to clear the outstanding balances on them. This means you have four different interest payments at different rates every month. 

You can take one personal loan, which is a debt consolidation loan that is sufficient to pay off all the four credit cards and then repay the loan every month with one payment. So how does this help improve your credit score? Well, by making the payments and paying off the credit card balances, your credit score will improve. There is yet another benefit. If you can get a debt consolidation loan with a lower interest rate compared to the rates you are paying on the four credit cards, you will be able to make a lot of interest savings.

Credit Building Personal Loan

Some personal loans can be used primarily to build credit. Loans used for this purpose are referred to as credit-builder loans. How does this work? Well, a borrower is required to make fixed payments every month on the desired loan. Once the loan amount plus the interest is paid, he or she can gain access to the funds. Once you are done with the payments, you would have already built credit through the monthly payments. The funds will then be yours without any restriction. You can also try a credit builder credit card and link our article: Credit-builder-card-everything-you-need-to-know

Personal Loans Allow a Borrower to Use a Co-Signer

In case you have bad credit, you can look for a friend who can co-sign the loan for you. The point here is that going to mutually share the loan responsibility. In case you default, the co-signer will be held personally liable for the loan. But why think of defaulting when you want to build your credit? Co-signing a loan is also among the most effective ways of building credit. The payments made are usually reported on both you and the co-signers credit profile. This means that the technique will improve credit for each one of you.

A personal Loan Can Help Lower Your Credit Utilization

We have already explained how debt consolidation loans can help improve your score. Credit utilization is closely related to the debt consolidation technique. In case you have used a personal loan to pay off all your credit card outstanding balances, the credit utilization on all the cards will definitely drop. Keeping your credit limits open serves as a catalyst in improving your credit score.  Credit utilization is also one of the factors used to compute credit scores. To maintain or raise your score, you should keep your credit utilization limit at a maximum of 30%.

Allows for Credit Mix

A credit mix is also considered in computing credit scores. It usually accounts for up to 10% of borrowers’ credit scores.  The point here is that lenders want to be certain you have the ability to deal with different types of credit in a responsible way. Just single or two types of credit cannot help you.

The Bottom Line

There are different ways of improving the credit score. Personal loans can help in at least six ways as discussed in this blog. If your goal is to build credit, you will do your best to avoid financial habits that can hurt it. In our next blog, we will discuss the focus on that.
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How To Manage And Regain Control Of Your Family Finances

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