If you find yourself maxing out your credit card regularly, going over your credit limit, or not making timely credit card payments, you could find yourself in debt.
If you find yourself maxing out your credit card regularly, going over your credit limit, or not making timely credit card payments, you could find yourself in debt. The unfortunate thing about credit card debt is that it sneaks up on you, and once it’s there, it increases at an alarming rate. While credit cards offer a lot of flexibility when it comes to shopping and paying for other commodities, they do have one major drawback.
Credit cards, for all the freedom they give you to ‘buy now and pay later,’ have very high interest rates if you miss a payment. With interest rates typically starting at around 12% per annum, that number keeps going up with every next missed or late payment. If you are not keeping a close eye on your credit card spending and paying your bills on time, you could find yourself in debt of thousands of dollars. This can impact your credit rating as well.
As per a study by the corporate regulator, Australians owed a total of $45 billion in credit card debt in 2018.
Is there a better option?
If you need a little extra cash to meet your monthly needs, then yes, there is a better option. It’s called a line of credit, and it comes with several advantages. Let us take a closer look at why a line of credit might be a better option for you.
What is a line of credit?
A line of credit is an open-ended, revolving source of credit. A line of credit could be unsecured, which means you don’t have to put up any collateral to be approved. But there are also secured lines of credit. A line of credit is a great source of extra funds that does not negatively affect your credit score. In fact, if you use a line of credit for debt consolidation, you can improve your credit rating.
Advantages of using a line of credit
Flexibility: When you apply for a line of credit, a lump sum amount is kept in a revolving account for you; the whole amount is not transferred to your bank account. You can access the funds from your revolving account as and when you need. You can withdraw as much or as little as you want as long as it is within the limit of the line of credit. You can also use the cash for anything that you want.
Higher credit limits: A line of credit can have a higher credit limit, and you can choose a limit that suits your needs. Lines of credit provided by &Solved has a range from AUS $3,000 to AUS $30,000. Within the limit, you can withdraw the cash whenever you want.
Easy cash advances: A line of credit is a lot more convenient and economical for a cash advance. If you need cash in hand, then nothing beats a line of credit. You don’t have to pay any extra fee for a cash advance because a line of credit works by providing cash advances. As long as you are within your credit limit and you pay back what you withdraw on time, there are no extra charges.
Only repay what you use: Even if you have a line of credit with a limit of $30,000, you don’t pay interest on the full amount. You only need to pay back the amount that you have withdrawn and the interest on that amount. So, if you withdraw $5,000, you will need to pay back the $5,000 within the specific time and with interest only on that amount. The interest rates of a line of credit are also usually lower.
Line of Credit from &Solved
&Solved is a boutique finance company that provides customised lines of credit. The application process is quick, hassle-free and completely online. Your line of credit can be customised to suit your finance profile so that you can comfortably manage your payments.
To apply for a line of credit with &Solved, you simply have to visit the website with your proof of ID and financial details, fill out the application form and send it in. There is no application fee. To know more about our services and how you can apply for a line of credit, please contact us