You have probably used the credit card. The alternative is a great option for purchases, especially for more expensive purchases, because it allows the purchase in installments, ease of handling and payment only future. Did you know that credit cards are one of the types of consumer credit available on the market?
Consumer credit is a type of personal loan
It is obtained by the consumer for the purchase of consumer goods, ie household items, clothes, food, travel, health care and education.
This type of credit, in addition to the credit card, can be provided through checks, loans and payroll loans. In general, the definition fits any value obtained for the purchase of a property pre-established by the lender, and which corresponds to the expense on the installment.
Payroll loan is a type of consumer credit, and the payment of installments is linked to the salary of the applicant.
For this reason, a very common option for consumer credit is credit, offered by the store itself. Thus, instead of borrowing elsewhere, the consumer can get values from the seller, and thus commit to the payment of installments of the purchased good. As a result, consumer credit can be purchased from finance companies and banks as well as from department stores.
Beware of the ease!
As with any type of credit, the consumer who buys values for the purchase of a consumer good is subject to interest. There are also fees corresponding to the values, which ultimately result in the Total Effective Cost (CET).
The CET refers to the entire amount paid for the purchase of a good, that is: for a $ 300 appliance, the consumer will pay the $ 300 plus interest, insurance and other, totaling more than the original value of the good.
Thus, the use of consumer credit should be done only as a last option, even if it corresponds to the common use of credit card. If possible, it is more interesting for the individual to plan the purchase for the following months.
Thus, it will be possible to save values in the budget and perhaps pay off the item in sight. Cash, in addition to finalizing debt, also opens the door to securities trading – there is always the possibility of discounts!
Usually, the term for payment of this type of debt is short, going up to six years.
Consumer credit: when to use?
The first step in getting consumer credit is to verify your actual need. Buying that good is critical, or can it wait a few months? If the item isn’t critical right now, save money and wait for a promotion.
Planning monthly expenses can help you understand if you really need credit, and it’s critical to value savings.
Now, if the product is really needed, consider first readjusting the budget and saving. Perhaps with some momentary cuts it will be possible to buy the good without credit.
If the option is really for consumer credit, however, attention is needed. Initially, regarding the financial creditor. Is the institution known? What are the customer opinions about her? What conditions are offered. It is important to look for the creditor on the internet and social networks and analyze what other consumers say about her.
Before getting the credit, the individual must carefully read the contract, know all their rights and duties and amounts that will be paid. This will make it less dangerous for you to purchase the desired item as a headache.