What questions should a consumer ask before accepting a credit card?
Consumers should know the reasons for applying for a card. Sherry is submitting an application so she may start a history of credit. There are various aspects that a client should know when applying for a card. Foremost, the customer needs to ensure that the card matches her needs by equaling the profits of one credit card to another ( Cull, 2015) . Second, another query involves asking is what dues are linked to the card as much as any regular or annual subscriptions. Finally, several cards are acknowledged at various locations compared to others. The most popular credit cards in the United States are Visa and MasterCard, and they are acknowledged at every trader that assents credit cards.
What are the advantages of building a good credit history?
The benefits of generating a good credit history would set her up for achievement regarding the making of large acquisitions that need bankrolling, for instance, a home or vehicle. This will similarly offer Sherry more discussing influence when it came to purchasing products. This aids in lowering the value of an item. Another reason of having a good credit history is for insurance cover. Various firms believe that individuals with bad credit score tend to file more assertions and these individuals are reprimanded with a greater insurance premium ( Thomas, Crook, & Edelman, 2017) . With a good credit score, an individual is guaranteed of paying less for insurance cover compared to applicants with inferior credit scores.
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What are the disadvantages of having access to credit?
Some shortcomings including overuse by most clients as they are so stress-free to use and acknowledged in numerous retail centers. Another shortcoming entails the perception of credit cards as an additional source of revenue and many fail to realize that failure to pay one’s credit card bill may damage one’s credit bureau reports and reduce chances of future borrowing. Most clients fail to realize that credit bureaus disseminated around the United States and other nations typically have a record of each card account along with any other lending individuals take ( Cull, 2015) . When individuals borrow more, a creditor may view all debts incurred and reject any loan application.
What are some of the possible alternatives you may have other than using a credit card to establish a credit history?
In regard to building up one’s credit score, cards are not considered the only option. Even though credit-reporting organizations frequently utilize credit card acquisitions and disbursements to assess one’s solvency, this method is not exclusive to a card. Other modes of establishing a credit history includes application of a personal loan. The other method involves application of a secured credit card ( Thomas Crook & Edelman 2017) . The third method involves management of a debt to credit ration. Lastly, reporting an alternate payment and repayment of existing loans.
References
Cull, M. (2015). Securing and managing credit. Financial Planning in Australia: Advice and Wealth Management , 245-286.
Thomas, L., Crook, J., & Edelman, D. (2017). Credit scoring and its applications . Society for industrial and Applied Mathematics.
