Should You Borrow Money for a Holiday?

Borrowing is something that some people do without a lot of thought, but it is important to always give things like this a lot of consideration. Borrowing is always expensive and you need to calculate how much a loan will cost you so that you know whether it is worth getting one or not. By calculating the cost of borrowing you will know how much extra you will have to pay for the item by borrowing the money to pay for it. You should be able to do this fairly easily or ask the lender to help you so that you are fully aware of the full cost of the loan.

Holidays are considered to be luxuries. Therefore many people may say that you should not borrow money to pay for one. It could be wise to only borrow money in emergencies so that you do not get into too much debt and you are not financing fun things with borrowed money. However, others feel that you only live once and you should enjoy it and spend as much as you can. A holiday may be needed to relax and get away and so you may feel that it is worth the extra cost of borrowing so that you can go.

Before you decide it is worth considering a few factors. Firstly, if you have savings then it is much better to spend those rather than to borrow money. This will save you a lot of money. Also decide whether you really need the holiday and whether it is necessary to spend a lot of money for one. There are lots of holiday options and they cost lots of different prices and so you will need to consider whether an expensive option really will be worth the extra money or whether just having a simple holiday will still have the same relaxing effect on you. It all really depends on the reason for the holiday and what you are hoping to get out of it.

As well as thinking about whether the holiday is worth the money, it is also worth thinking about the future and the repayments. Will you be able to manage the repayments of the loan. Consider how much these will be and how much of a difference it will make each month having to repay that money. If it will be a struggle to manage all of your monthly expenses then it could cause a lot of stress paying it back. If the idea of the holiday was to relax, then having stress afterwards may not be worth it.

It is also worth considering what might happen if you lose your job or cannot work in the future and still somehow have to find the money for those repayments. You may be able to take out insurance to protect against this, but it is not always that easy to make a successful claim on this sort of insurance. Therefore, if you think that this will be the answer, then make sure you compare these types of insurances and make sure that you are satisfied that they will be able to help you out.

The decision is very much a personal one based on your circumstances. However, it should not be a decision that you make quickly. Make sure that you think hard about the implications of your decision. Ensure that you are confident that you are not taking that much of a risk and that you are happy that you will have a good future as a consequence of the decision that you make. It sounds very serious and every decision to borrow money should be made seriously. Debt can be a nasty thing and if you struggle to repay and maybe even miss repayments, the costs can escalate and so can the stress. It may not be worth the risk if this is likely to happen as it can not only be extremely stressful but it can mean that your financial situation is very bleak for a very long time.

A fun holiday may feel well worth it, but if you then have years paying it back and financial struggles, that few weeks of relaxation and pleasure may just not be worth it. Consider how much you need the holiday and whether you are willing to risk the possible problems with a loan in order to have that short time of fun. There are alternatives, such as staying at home and relaxing there, going camping locally or having day trips out which are cheaper and can be just as much fun. A holiday in the country you live in will usually be cheaper than one abroad and self-catering will be a cheaper option compared to a hotel. So look through the options and consider which will fit in best with your budget and reduce the risks you are taking if getting a loan to pay for it.

Are Zero Rate Credit Cards Worth Applying For?

There are quite a few lenders now that offer a zero rate credit card, although they are rarer then they have been. These credit cards will offer borrowers a certain amount of time of being able to have no interest on their borrowing. This can be anything from 6 months to a few years, depending on the terms of the lender.

Some people use these cards a lot. Sometimes they will spend on a credit card to the maximum they can. Then when the zero interest period runs out they will pay it off or get a balance transfer to another zero interest credit card. This can work well in some circumstances. If you borrow and then save the money up so that it can be paid off before the zero interest period runs out it means that you get a loan for free. Some people even put the money they save in an account which earns them a good bit of interest so that they can profit from using the zero interest credit card.

However, it is important to think hard before getting the zero interest credit card. When the zero interest period runs out there will be a variable interest rate that kicks in. This is much higher than the interest rate on a standard credit card. This means that if you are not able to do a balance transfer or to pay the card off, then you could end up paying dearly for having the card. It is therefore a good idea to make sure that you are confident that you will be able to pay the card back in full when this period ends, before you take the card out in the first place. It is also wise to make sure that if you do a balance transfer that you check the cost of this before you plan to do it. There is often a charge for this and so you need to find out what this will be and work out whether you think that you will still profit from doing this even if you have to pay this charge.

For some people a credit card is not a good idea. They spend the money and do not make provision for paying it off and then end up paying the minimum balance for a long time. This is very expensive and can lead to someone getting into a lot of debt over a long period of time. If you have had a credit card before then you will know whether this is the sort of thing that you might do. If there is any risk of it then you should not apply for it. If you have never had a credit card before then it is a bit harder to judge. However, you should know yourself and your spending habits well enough to make a judgement as to whether you think it is a good idea for you to have one. If you have any doubts, then it is best to avoid having a card at all as you could end up getting into a lot of debt and this is not a risk that anyone should take.

When you apply for a card that has zero interest you may find that you get turned down. The more rejections you get for applications for credit, the more negative an effect that will have on your credit record and it could look worse and worse if you keep getting turned down. Therefore it is worth taking a look at your credit record before you apply for the card so that you can see whether you are likely to be accepted or not. If there is a low chance, then it is not worth bothering to apply and it may harm your chances of borrowing elsewhere if you do. If you are in this situation it is worth checking your credit record to make sure that everything is correct and if not, get it changed. You can also try to improve it by paying back other money that you owe and making sure that you do not get behind in paying bills. Your income will also have some bearing and so increasing this could help you as well.

So there are many factors to think about when deciding whether to apply for a zero interest card. You need to consider whether you think you could benefit from the card and gain financially from it by calculating if you will be better off. It is especially important to make sure that you will be able to pay it off or move it when the zero interest period runs out so that you do not have to pay the high interest rates. You need to make sure that you know you will use it sensibly and that you will be accepted for it when you apply.

Should Payday Loans be Banned?

There are some people that think that payday loans are so bad that they should be banned. They feel that they take advantage of people who already have money problems and that they are just too expensive. However, there are others that can see some advantages to them.

Payday loans came about because lenders could see that those with a poor credit rating had no opportunity to borrow money if they needed some in an emergency. They decided to fill the gap in the market by providing short term loans for those that needed it that would have no credit checks. In order to finance the risk that they were taking, they had to make these loans more expensive than traditional forms of lending. The loans are set up so that when applying, the borrower knows exactly how much money they will have to pay back and when. The repayment date is usually set on the day that the borrower is paid so that they will have money in their account to pay it. However, if there is not enough money to pay it, they will get charged a fee. It is these fees that many people have a problem with as they are very high and they can increase very quickly.

Some people feel that these loans are aimed at the most vulnerable people and that the reason they have a bad credit rating is because they have shown they are not good with money. This means that they are more likely to find it difficult to pay back and possibly borrow more than they have to as well.

However, others feel that they offer a source of emergency money that would otherwise not be there. They feel that it gives them the opportunity to be able to pay a bill or their rent to perhaps save them from being evicted or from being cut off or even not having enough food.

It is possible to see both sides of the argument. However, some call for the loans to be better regulated and now there are rules on how high the fees can be so that the costs cannot spiral out of control. There are some regulations but it is felt that these do not go far enough to protect vulnerable people.

There are people that have used the loans and found them to be beneficial. They were prepared to pay the high costs so that they could get the financial help that they needed and found them good. However, there are others that found that they could not pay back the loan and ended up having debt accumulating quickly, perhaps by taking out other loans to pay off the first until they had so much debt they were completely out of their depth.

If you are considering a payday loan it is probably best to stop and think it through first. Work out whether you really need the money or whether you can wait. Think about whether you can get it anywhere else that might be cheaper before getting a loan. If you do want a loan, make sure that you are confident that you will be able to pay it back when you need to. If every borrower put that much thought in before they took out a loan of any sort, then there would be a lot less people getting into trouble by not being able to make the repayments.

The only way that payday loans could be banned would be if the government were to step in with regulations. However, most governments do not want to be that heavy handed but if they can regulate them so that they are fairer this should help. This may take a long time though and as the payday loan companies will not withdraw them and put themselves out of business, it is likely that they will be around for a long time yet.

Another way to help people not to get into trouble with this sort of loan or any other is to make sure they have a good understanding of finance. The best way to do this is to teach children form school age to have an understanding of personal finance. Then when they are in the situation to consider a loan, they will know what factors to think about and whether they should be taking one out or not due to their ability to be able to repay it. Although parents can help teach their children this, not all parents have been taught themselves and this means that they will not be able to help their children. Therefore doing it at school will make sure that all children get this information and therefore will be able to use that knowledge to make sensible financial decisions when they are older.