Why Use Credit?
Some people feel that if they have the cash to spare they are wise to pay cash for what they buy rather than to use credit. It will cost them less. It will leave them free of worry about paying bills. They will have less trouble living within their income.
Others say that cash has a way of slipping through their fingers. They welcome the discipline of making payments and find the family lives better when their income is closely budgeted by regularly recurring bills.
Still others, who have substantial cash reserves, prefer to protect them. They find it is easier to repay a loan from a third person than one they make to themselves from their own savings account. Some have good investments they do not like to disturb.
Most financial advisers feel that credit, used wisely, can be quite helpful to the average family in several ways:
1. The use of credit can help provide the kind of environment and the kind of life that will make the marriage more stable and more rewarding. Discontent and frustration can disrupt and destroy a marriage.
2. Things bought through credit can, in the long run, make possible a reduction in living expenses. A good refrigerator cuts down on wasted food and allows more economical buying. A household with all modern appliances almost runs itself so there’s no need to hire a cleaning woman or to send things out to a laundry. A computer, cable and television may mean less money spent on movies and other outside entertainment.
3. Credit is a budgeting tool. It helps families adjust the peaks and valleys of need to the regularities of income, by permitting the cost of major purchases to be budgeted out of several months’ income.
4. Credit also provides a cushion against the unexpected – the minor family crisis which can upset the most carefully planned household budget. Perhaps an accident or a layoff temporarily cuts off the family income, or a car breaks down or a furnace blows up and immediate cash is needed, or perhaps one or both marriage partners have overspent – it happens sometimes – and they need help in consolidating their bills so they can tighten their belts and get back on budget again. In all of these situations, credit can be quite valuable to a family.
5. Some families also like the discipline of making regular payments. They find it difficult to save and the money in their pockets seems to melt away. These families find they can increase family assets best through the discipline of credit.
Credit In Your Future? | Types of Credit | How Credit Can You Afford?
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