Credit cards , a financial instrument that many people have, are the most common, consistent and usual way to obtain credit, since they offer their clients a monthly amount set by the bank that they can have in the form of credit.
The function of making payments using the credit card is probably the most used but it does not mean that the only, many times there is a second option and it is to make withdrawals with it as loans. Should you take them or not?
Loans with fixed maximums, at known rates
If you use your credit cards usually month to month, and especially if you usually use amounts very close to the maximums granted by the same, it should not be a complex decision to take loans or cash withdrawals through it.
When you get a loan via credit card, you are taking money that is not yours, because your bank account can be empty and if for example, you use a debit card to withdraw from your account you will not get any euro from it, because there is no. The credit card is allowing you to withdraw cash that the bank is lending you.
The advantages of using this type of loans can be grouped as follows:
- They do not require paperwork or request to the bank: nothing better than needing money, not having it and going to withdraw it from the cashier without needing any formality! That is the main kindness provided by this type of products, as they are associated with your TDC no other solitude is required, because they are implicit to the use of the card.
- You know how to pay the bank and the rates: they are the same as the credit card, probably even with facilities for cancellation and you have standardized the way you pay the bank, then, nothing will change as soon as a procedure to cancel the loan.
On the other hand, there are some aspects not so advantageous or outstanding to opt for this type of loans, and the main one is:
- The maximum withdrawal amounts are usually reduced and go hand in hand with the credit card. In other words, the balance provided does not have much difference in relation to your usual consumption, so surely that money will serve you more than anything to cancel any debt or payment that you could not do with the plastic, at the end of the month you will not see a sudden change in consumption, which in turn can be an advantage.
- It is a loan with higher interest than others that you could acquire: since it is a loan with a credit rate, like the one on your card. It is not a bad feature if we think it is a loan that is available monthly without requiring procedures to obtain it, and since the amounts are not very high, the interest will not be exorbitant.
The most important thing to consider when making use of this type of loan is, if the end warrants it or you just want it for the idea of having more money to use.