More often than not, people associate “Credit” with “Debt”. The very nature of credit is spending money you don’t actually have presently which would obviously incur a certain amount of debt. And as we all know, debt is something that people tend to avoid. Because of its close association, most people would have a similar reaction when it comes to the concept of credit. However, there are actually a lot of benefits to credit that not a lot would actually know about.
Credit opens doors for you to have big-ticket items that are necessities like a home as well as coverage for medical emergencies. For most people, the reality is you won’t always be able to cover the needs or wants you to have with the finances you have on hand, and capitalizing on credit improves the quality of life by making items you may need within arms reach.
Here are some other ways on how you can capitalize on credit:
- CONVENIENCE: Given the New Normal we are in; Credit is a form of contactless transaction. This simply means that the risk of you getting infected by COVID-19 are slimmer than if your purchasing avenue is cash. Needless to say, you’re also able to make the purchases you need through online outlets.
- EMERGENCY SITUATIONS – in an event of any emergencies, be it items you need to buy right away or a medical emergency. You can have credit to cover it initially. This is especially helpful if you do not have enough finances presently. Many providers have flexible payment terms and you can select the one that works best for you.
- PERKS AND FREEBIES – many credit providers are partnered with various retailers and service providers that offer a range of discounts on products and services. Getting any item for less than the original cost instantly translates to money well saved.
- DEVELOPING DISCIPLINE – Credit is good practice in developing self-control habits. With the right mindset, it is a good way to fire up your PFC (Prefrontal Cortex) which is the area of the brain that deals with logic and reason by considering factors like the price of the item you want to buy as well as the payment terms and cross-check that with your ability to be able to pay it back.
- UNDERSTANDING THE CONCEPT OF CREDIT – A big way to capitalize on credit is really understanding its nature. And this is what most people seem to neglect which usually leads to crippling debt. It is important that CREDIT is not FREE MONEY. Accepting and really comprehending this idea is the key that will allow you to get the most of your credit. This in turn allows you to develop a structure of planning and identifying what your financial priorities are.