You recently started your financial activities, perhaps opening a savings account, and suddenly the banks start calling you to offer you a line of credit.
Sounds tempting right? It would be great to have an amount of money when you have no balance in your account, but is it advisable? And is it good to use all the credit a bank offers you? Learn more in this note!
What is a line of credit?
A line of credit is the amount of money the bank offers you when you have no balance in your savings accounts . Obtaining it is as easy as applying for loans online .
You can access a credit line through the bank contact with you. You can also request it in person. You can also get an online credit line.
Can I use all the money from my line of credit?
Finance specialists advise no. In fact, they comment that using more than 50% of the approved line of credit can lead to severe indebtedness .
It is recommended that the monthly payment of the debt that represents a credit card does not exceed 30% of the salary that a person has. In other words, if you have a salary of S / 2,000 soles, your monthly payments for consumption with your credit card should not exceed S / 600.00.
Due to the above, it could be said that neither more than 30% of the amount of a credit card should be used .
Do I only pay the money I spend on my credit card?
No, when you use a credit card , even if you choose direct payment you will have to pay the bank commissions , such as the deduction insurance. If you choose to pay the money you use from your installment credit you will also be charged interest.
As you see using your total credit line is not the best option. Keep reading financial advice on our blog .