If you can’t pay back a payday loan right away, for example, you might have to take out another loan just to keep up with payments.
"INTEREST-FREE” LOANS FROM A RETAILER
If a store or online retailer offers anything “interest-free,” you should look very closely for the catch. Often this means that interest won’t be charged at first, but that after a period of time the interest will kick in. And at a higher rate than you might have paid otherwise.
PRIVATE LABEL OR STORE CREDIT CARDS
We live in the age of the loyalty card. Everyone from your grocery store to your favorite department store wants you to sign up for their special card. But there’s a difference between a membership card and a credit card. If the store is offering a Visa or Mastercard with their name on it, it counts as credit. The same is true if you pay for any service in installments over time by opening a credit account. It might not seem like credit at first, but these accounts will show up on your credit report.
Credit can be an asset if used properly and responsibly. So while swiping a credit card or taking a cash advance may feel good in the moment, you might regret it later. Stay informed about what affects credit, and you’ll like the look of your credit report.
As always, we’ve got your back. — The On Your Own Team