How Important is it to Prioritize Your Credit Payments? – Guest Blog
In the first of his guest blogs, Barney is going to help you understand why it’s important to prioritise your credit payments. Barney approached me, asking if he could blog for this site since he found the blogs I write and also host really useful and informative.
No – I’ve not got the wrong spell checker on, Barney actually is American and it didn’t feel right to “correct his spelling”, this is his blog, so the American spelling is the right one for this blog.
To introduce to you all, I asked Barney to write a bio, here’s what he said “Barney Whistance is an enthusiastic Finance and Economics blogger who is most interested in global economic climate. Apart from doing majors in Finance, he is also a Chartered Accountancy Student and planning to complete his Ph.D. in Finance before he turns 30. For more updates follow him on LinkedIn | Twitter | Facebook | Gmail”
So enough from me, over to you Barney:
How Important is it to Prioritize Your Credit Payments?
With financial crisis prevailing in almost every home, most people use some or opt for some credit to make purchases, improve or construct their homes or finance their college or high school tuition fees. But not everyone understands the basic principles of credit payments.
Most of them are new to credit payments and aren’t sure how to manage it properly. So here are a few things we think that you should know about how important it is to prioritize your credit payments.
The Truth About Credit Payments
Whenever you take loans or use credit; you are borrowing money from someone and that money has to be repaid so when you pay back the borrowed money, you have to pay the actual amount of the borrowed money plus the interest/or some other fee.
Some lenders/banks or government institutions offer deals which allow you to make payments over an extended period of time before they start charging interest. One thing is for sure with the credit payments and here is the basic equation for it:
Borrowed Money + Interest = Total Payable Loan Taken.
Credit is offered in various forms which include credit cards, lines of credit, installment loans, student loans or paycheck advance services.
- Credit Cards
Credit card payments are the simplest form of credit where it is just about making any purchase depending upon your card limit set by you or the bank.
- Lines of Credit
Lines of credit may allow you to take on bigger projects like home improvements etc.
- Installment Loans
Installment loans are simple mortgage or car loans taken and make payments which you are unable to pay. Monthly payments can be set between you and the lender/bank with a certain interest rate.
- Student Loans
Student loans or federal student loans are offered to assist students to be able to pay their college or high school tuition fees. They are often designed with lower interest rates, extended deferment time periods or forgiveness provisions.
- Paycheck Advance Services
Paycheck advance services are offered when a business give you money based on the paycheck that you’ll be receiving soon. It anticipates that you will pay back as soon as your pay day comes around.
Prioritizing Your Credit Payments
First of all, you have to evaluate which debts you owe to be tackled down, what credit payments to make as you might be aggressively paying off your debt with a much higher interest rate.
With lower credit payments there are lower interest rates too, so you might want to pay off a certain loan with the lowest balance owed as paying off even a small debt provides a sense of accomplishment that can energize you to tackle larger debts.
If you spend more than you can afford and worry about making ends meet or suffer stress while paying for a loan/credit payments, don’t let the fear or embarrassment take hold of you to seek help. Contact your creditors/bank/lenders before payments are due and let them know about your situation.
Be persistent to make a few calls and ask them to waive fees, give off a few weeks to pay off, reduce interest rates and help you to create a payment schedule that could work within your budget.
When you apply or take loans, you are legally bound to pay off your payments. It is crucial to maintain a positive cash flow and a good credit score. Your family’s security could be at risk with any legal action such as garnishment or repossession.
There are penalty charges for late payments which further makes it difficult to pay off payments.
There are certain organizations that provide mandatory counseling and debtor education. Bottom line is that you prioritize your credit payments to avoid any unfavorable circumstances.
Barney Whistance is an enthusiastic Finance and Economics blogger who is most interested in global economic climate. Apart from doing majors in Finance, he is also a Chartered Accountancy Student and planning to complete his Ph.D. in Finance before he turns 30. For more updates follow him on LinkedIn | Twitter | Facebook | Gmail