Many times, with how easy it is buy on credit We prefer to use this method of purchase than cash or debit. However, is this really the best for our financial health?
Money or buying on credit, which is better?
When we are going to buy a new product, we can choose between paying with our own money (cash or debit) or using the credit line of our cards. This is very common and both options are valid, however, we must make responsible use of credit cards so as not to affect our finances. And it is that poorly planned purchases with credit cards can lead to unpayable debts that wreak havoc on our credit history.
Next, we will evaluate the advantages and disadvantages of both options.
Buy with cash or debit
When we buy with cash or debit, we are acquiring a good with our own money. This means that we will not have to pay any interest or commission for our purchase to any financial institution.
The problem with always using cash or debit is that we do not generate a credit history with these movements. Another disadvantage is that if the money runs out and we need something, we cannot acquire it, as we will not have the funds for it.
Buy on credit
On the other hand, there are credit purchases where it is the financial entity that grants us a (limited) line of credit that we can have monthly. In contrast to the previous ones, for the use of these cards we must pay interest and commissions to the bank, for the purchases we make in installments, and if not, we must pay other expenses such as membership (with some exceptions) or tax credit.
Credit cards do help us build a credit history; and in fact, by demonstrating a good payment behavior, we can be able to expand our line of credit or access better loans or future credits. An additional advantage of credit cards is that each financial institution offers additional benefits for acquiring them, for example, points programs for award redemptions, sum of traveler miles, discounts at establishments, interest-free purchases at affiliated businesses, etc.
So which is better, pay with cash or credit card?
Both options are good, and their use will depend on our knowing how to handle them. Credit cards, however, are convenient if we know how to use them, we take advantage of the benefits they offer, we know our borrowing capacity and we comply with our punctual payments; since they will allow us to build a good credit history. Errors in the handling of these can bring us problems such as overdue or penalized debts, or even enter the black list of Infocorp.
If you have already had problems with your card debts, we tell you that, at AlDía we have the MiJunta and Pool programs that, through collective debt negotiation, will help you get out of those overdue debts. Contact us so that our consultants can help you identify which program is the most suitable for you!