Is Revolving Debt or Installment Loans Better for Your Credit

There are several types of loans available, with installment loans and revolving debt or revolving credit accounts being two of them. A big determining factor of being able to obtain either is your credit score. It is important to discuss your credit report with a financial advisor or credit counselor if you have a few blemishes. This will help you to re-establish yourself and determine which of these two loan types is best for your needs.

Installment Loan Basics

Installment loan amounts are determined based upon your credit score. Your income also plays a factor in this as you must have the ability to make the payments, plus interest. These are a good option when you need to make a large purchase such as a home or vehicle, or if you require home renovations. Installment loans are also available for a variety of personal reasons. The reason for the loan does play a small role in the determination of acceptance or not.

Revolving Debt Basics

Revolving debt, or lines of credit as it is commonly referred to, is ideal for persons with less than perfect credit. With this type of loan, you are not limited to a specific amount, you will have limits, but it is different than an installment loan. An example of revolving debt is credit cards. You do have a spending limit but you make purchases as needed, pay it off and continue to use the credit.

Which is better?

Installment loans are actually better for most consumers. This is because there is a set limit and a set payment schedule. Revolving credit is basically credit that is reusable as long as it is not at the limit. This creates more debt due to interest charges and other fees that apply. An installment loan puts a percentage of your payment toward the principal and a percentage toward the interest. The terms on installment loans are also much longer than revolving debt where interest continues to pile up.

Consumers have to make smart choices when it comes to money. This is because credit cards rack up hundreds of dollars in interest over the course of a year, depending on your assigned interest rate. These often cause financial trouble whereas there are more options for reconciliation with installment loans. Creditors are more willing to work with borrowers on installment loans, such as deferring a payment during a time of financial crisis.

Travel Cheaply by Using Points Cards Wisely

You’ve heard of all those point and reward cards, but may be wary about trying them. Some people swipe their debit cards for every purchase imaginable. However, they don’t see any payback like bank and airline credit card programs. As long as you use them responsibly, you end up winning in the end. With airfares costing thousands of dollars for just one seat, it’s comforting to know that you can redeem points or miles to get to your favorite destination.

Apply for More Than One
Many travelers don’t realize that there are some cards that allow you to combine your miles or points into a frequent flyer account. It has been observed by the experts on comparison sites such as MileCards.com that savvy consumers use the Chase United Miles program to fill up their MileagePlus account. They apply for two separate Chase cards, one for each spouse in a household. With all the bonus miles you receive for just signing up, you can have over 70,000 miles in the first three months! Although your credit score dips slightly with each application, all charges and payoffs slowly bring that number back up for a nearly perfect score.

Use It Everywhere
Some cards make it difficult to earn points. It used to only include specific travel expenses such as hotels or rental cars. Today’s point cards reward you for almost every purchase. One point for each dollar is earned when you simply pick up groceries or pay for dry cleaning. Instead of using the debit card at restaurants, use the point card to receive two points for each dollar. If you have a busy family, both spouses can quickly rack up the points while picking up that coffee before work.

Talk to Your Provider
Some of the spending perks are often forgotten, including earning 10,000 miles when spending $25,000 in one calendar year. Talk to your card provider frequently to refresh your memory. Although you can go online to look at all the perks, sometimes it pays to talk to a representative. For example, they may have a new perk add-on that you weren’t aware of. In these cases, you can discuss the perk’s particulars to see if it fits your needs. Your next vacation could be closer than you think!

Pay off Monthly Balance
To travel cheaply, you need to keep your interest rates down. If you are charging extensively on the card, pay the balance off each month to avoid interest accumulation. This strategy forces you to live within your means, but still adds up the points and miles to travel with heavy discounts. Your credit limit may increase as a result of on-time, full payments as well. Credit scores rise with more point accumulations. The reward credit card ends up working for you. Traveling cheaply has never been so easy.

Reverse Those Questionable Charges
Avoid paying for items that are defective and apply those savings to your next travel arrangements. For example, you purchase a dishwasher on your point’s card. However, the unit has a manufacturing defect. Although the maker should cover all expenses to return, replace or fix the unit, you can use your card to reverse the charges as soon as possible. You won’t see any interest fees for the charge, saving you money, time and stress. Because the card is not charged, you can deal with the manufacturer without worrying about interest and the amount sitting on your card history.

Peace of Mind
Most points cards have some form of trip insurance. If you take a cruise, for instance, any issues are covered by the card as long as you charged the trip. Shortened trips from sickness or engine malfunctions are redeemable through the card using the insurance, depending on the provider. This travel insurance ensures that you don’t lose precious savings, allowing you to apply them to the next vacation. Saving money but maintaining peace of mind is worth the credit card application process. Vacations can cost nearly $5,000 or $10,000, so insurance helps you in times of unforeseen circumstances.

Instant Budgeting
To save money effectively, you need to budget yourself. Points credit cards give you a chance to see all your charges laid out in an easy-to-read manner. You’ll see all the businesses and their charges. If you need to cut some expenses, highlight charges that should be avoided during the next billing period. You’ll save money by analyzing your spending, allowing you to save toward that next vacation. When coupling card rewards with your saved money, you’ll have a vacation to remember.

With strategic applications to charging responsible amounts for point bonuses, rewards credit cards give you the power to discover the world. You even rack up points with just everyday purchases, including groceries and meals at restaurants. Try a new credit card to see your options widen to include global travel.

Quick Ways to Get Cash Now

Emergencies happen and the funds to take care of those emergencies aren’t always available. Other than attempting to have a fast yard sale or put items up for sale in online forums, there are a couple of other options to consider. Keep in mind that these options do have fees and interest attached to them, but if can’t part with something permanently, these options are a good start.

Obtain a Car Title Loan                                    

Car title loans are given based upon the value of your vehicle up to $10,000. The vehicle must be paid off and you must have the title in your possession, not a memorandum title. What you will need is a valid checking account, proof of income and the ability to repay the loan. Title loans are setup in a similar way to installment loans where the balance is paid off in small increments rather than one big payment.

Consider a Loan

Quick cash loans are ideal for those that are employed but do not have good credit. These are also called payday loans. With a payday loan, you need a valid checking account, proof of income, personal references, a blank check and proof of identity.

With quick cash loans, you are expected to repay the loan quickly, such as on your next payday. High interest is associated with these loans as are administrative fees. It is ideal to ask the loan agent what the entire cost is before agreeing to take the loan.

Visit a Local Pawn Shop

If you are unemployed, you can visit a local pawn shop with items of value. You are not required to sell your items; a loan can be taken instead. Keep in mind that a loan can only be given for the item’s actual value and for a portion of what the pawn broker can sell it for if you default on the loan. You may not get all of what you need in the loan, but you will be able to obtain some cash to help you through the emergency.

The options above are a good start when you need quick cash. These loan options are instant; there are no waiting periods to find out how much you can borrow or if you can even borrow at all. The high fees associated with some of the loans simply come with the territory. Most consumers don’t mind the fees to get the cash they need now.