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Published On: Fri, Apr 17th, 2015

Credit cards offer several additional options

Excellent financial management is necessary. It is always better to accomplish all of your financial transactions on a cash only basis.

Unfortunately, in our modern society with all of the economic pressures which are encountered, this may not always be easy since there are many things which could be encountered which may either be totally unexpected or difficult to avoid.

photo 401(K) 2012 via Flickr

photo 401(K) 2012 via Flickr

Credit cards are usually the best way out when caught in a difficult, unexpected situation. Contrary to popular belief, whether you earn a modest income or are one of the fortunate ones to be in a managerial position, this will not determine whether your credit card application will be successful or not.

The issues which are actually taken into consideration and are important to financial institutions are your actual credit history, and not the amount of money which you earn in your current position. This is because there are many people who are earning very high salaries but who still live beyond their means and who are therefore not very faithful in repaying their debts at the specified date.

Financial institutions are very interested in credit histories
Consequently, even though you may be earning a modest salary, as long as you are punctual, and you ensure that you are paying your debt according to the credit agreement, financial institutions will not decline any credit application which is made by you as long as they are able to determine that such a loan is affordable and that you will be able to comfortably repay that loan.

Therefore, when you are speaking to one of your friends who are in a managerial position and they are complaining about how the bank have declined their application for credit, you should know that the situation has nothing to do with their income potential, rather the problem is with their credit history.

Even GE Visa Cards are working on the same principle where credit history takes precedence over income potential. There is no doubt that life is full of surprises and that there are so many things that may happen to people which will require an immediate and reliable financial resource. Credit cards could be that solution as long as people remember to manage their credit situation as carefully as possible.

What about the cost of credit cards?

Any credit which is allocated to you will naturally require the payment of interest on the amount which has been borrowed, but many of the modern credit cards offer many rewards that may outweigh the actual cost of interest and other fees. There are also many credit card companies that will accommodate a credit card applicant in many ways, and in some cases, no fees will be charged on that card for the first year of membership.

For those who travel frequently, especially abroad, a credit card can really help to simplify things. Although there used to be a three percent charge on all purchases made outside of the US, there are now many credit card companies that no longer enforce this rule. In all, there is absolutely no doubt that credit cards are very important, beneficial and helpful.

Guest Author: Mariia Lvovych

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