A 25-year old is done with college and is probably into his first job. At the threshold of adulthood, he wants to fulfill several dreams in a short period of time. Most people believe that having a credit card is an important factor of becoming an adult. However, there are many individuals who think such cards are unnecessary. Just like investing is not necessary, having a card is also not a necessity. So then why would a 25-year old need one?

Here are five reasons why having a credit card at the age of 25 is beneficial.

1. Deposits are Not Necessary

Some merchants who accept debit card payments require the customers to also pay a higher deposit at the time of booking. In case a person is unable to execute the plans, the merchants are still able to earn some of their cash deposit amounts (because there fund is done after deducting a certain sum). These are similar to security deposits and may become inconvenient. A credit card eliminates all such difficulties for the users because merchants do not require deposits for such transactions.

2. Deferred Payment

When an individual uses a debit card to purchase any product or service, the money is immediately deducted from his bank account. On the other hand, a credit card purchase does not have to be paid until the next payment due date. For example, if a cardholder purchases something using his card on the 1st of a month and billing due date is 31st of the month; he enjoys an interest-free period of 30 days. Although this may not seem like much, being able to make purchases without the need to pay upfront cash may help users save a lot of money over a longer period of time.

3. Affordable Home Loan Interest Rates

Many people think that they may receive better discounts and close a home purchase faster if they pay in cash. However, if a person has used his credit card responsibly and made timely payments, this is reflected in his credit score given by a credit rating agency like Credit Information Bureau (India) Limited (CIBIL). A higher credit score is beneficial in reducing the interest cost on home loans and other types of borrowings. This makes it less expensive for people to buy their dream home. Furthermore, paying the mortgage installment with a card reduces the actual cash outflows and helps prevent financial difficulties.

4. Reward Points

Most card companies provide excellent reward-based credit cards for their customers. These issuers allow the cardholders to accumulate reward points on their spending. These are redeemable against several offers, such as travel deals, air miles, or purchasing some products and services. In addition to the reward points, users may enjoy cashback offers and benefit from signup bonuses that make credit cards more beneficial.

5. Develop Credit Score

A 25-year old may not have any credit history. However, he may need to avail of a loan in a couple of years to purchase a home or any other asset. This period may be used to develop a good credit score using a credit card. When an individual utilizes his card responsibly and has no delays in payments, it has a positive impact on his credit score. Having a strong credit score has several direct and indirect benefits, such as increased possibility of receiving approval on loans and lower interest rates.

People often find lots of information on how using a credit card may have severe outcomes, such as financial distress and debt traps. However, using a card wisely also has many benefits. However, before applying for a credit card, it is important to check credit card eligibility and understand the terms and conditions related to credit cards.

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Tabling your household budget can be pretty tough on a good day, when your income covers all of your expenditures. But when you’re attempting to create a financial plan and the cost of your expenses outweigh your pay (and your savings), you can wonder how you’ll make ends meet. Unfortunately, you can’t blame your budgeting woes on dyscalculia or irresponsibility; sometimes the only reason why you’re in the red is because of bad luck. All you need are too many bills with overlapping due dates with not enough pay, and you’ll be struggling to create a budget that works. Luckily, there are helpful options out there that can help you get your finances back on track, like short-term loans from reputable direct online lenders.

What’s a Short-Term Loan?

Loans with this title have a fixed repayment schedule. Many of them are considered payday loans because they require full repayment by the time of your next paycheck. The best options for payday loans have low barriers for entry, which means you can acquire them quickly and easily, regardless of your credit rating. Many of these lenders, which includes MoneyKey, don’t look at your credit at all. As long as you’re an American citizen over the age of the majority with proof of income, a bank account, and an email address, short-term loans are a convenient and viable way to access the cash that you need. They’re extremely useful in situations when you need money as soon as possible – when surprise bills or repairs require payment according to a tight schedule.

Why Use a Direct Online Lender?

The Internet has simplified most areas of our lives, so it only makes sense that it has helped to streamline the process of acquiring loans, too. Now you don’t need to travel to a brick and mortar lender to get the money that you need. There are direct online lenders, such as MoneyKey, that offer all of the same services online. You can fill out their online application directly from their website, submitting the information mentioned above and get an online payday loan from Moneykey.com. By virtue of being processed online, you’ll receive a more immediate response to your application. As opposed to waiting weeks for a person to call or schedule a meeting about your funds, direct online lenders will notify you instantly of your qualification, and you’ll receive your small dollar loan within one business day should your application be approved.

How Can You Protect Yourself?

Though short-term loans are a convenient way to getting the money you need, it’s not always easy to get a product that reflects your financial capabilities. There are some lending companies that offer small dollar loans with unmanageable rates, terms, and conditions that make their financial products difficult to repay. They do this on purpose in hopes you’ll rollover your payments to incur late penalties and more interest. State governments have stepped into limit these lenders abilities to scam consumers by introducing laws and regulations limiting the rates, terms, and conditions of lawful small dollar loans. Make sure the direct online lender you turn to for assistance can provide their state licensing to prove their financial products are in accordance with the law.

Find a loan that has a repayment schedule you can manage, and you’ll have the financial assistance that will help you pay for your surprise expenses without putting your budget into flux. While you shouldn’t rely on these products month to month, they act as a pinch hitter when your income fails to cover your expenses.

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If you’ve recently tried to borrow some money or take out a credit card but have had the dreaded rejection email or letter, it’s pretty much certain that there is something amiss with your credit score. This can seem like an enormous setback, an intractable problem that is going to wreck your plans and prevent you from getting on in life.

But, bad credit scores are not only highly common; they are highly fixable too. Many hundreds of thousands of people in the United Kingdom suffer impaired credit ratings and yet still manage to borrow money through the so-called sub prime lending sector.

Furthermore, given good financial management and discipline, these people are able to fix their credit scores so that, after a certain period, they regain access to more mainstream forms of credit.

Credit scores explained

There are three main credit reference agencies in the UK – they are Experian, Equifax and CallCredit. These organisations hold data on every person who has borrowed money, holds a utility or insurance account or a mobile phone contract. This data includes information that includes existing and past addresses, the payment history on each account (whether payments are and have been kept up to date), a record of any defaults, bankruptcies or county court judgements (CCJs).

The information is straightforward. You can apply to one or all of the reference agencies for a copy or your record (for the payment of a small fee) and you should be able to see immediately where your problems lie if you’re having trouble getting access to credit.

But, it is how the agencies and financial organisations interpret the data that results in a credit score. This number – usually between 300 and 900 (although this varies according to which agencies figures are being used) – is an expression of risk that a borrower represents to a lender. The lower the score, the higher the risk. Some agencies will express that risk as very poor, poor, fair, good or excellent. Very poor might be a rating between 300 and 400 while good and excellent might extend all the way from 700 up to 900.

Those judged to be very poor are likely to have difficulty getting access to most forms of credit. They will struggle to be accepted for loans, credit cards, bank accounts and even mobile contracts. This rating may even affect their ability to get a new electricity or water account set up.

People with poor credit ratings are likely to be rejected by many lenders, but some will consider their applications. However, they are likely to face higher interest charges, lower loan amounts and, sometimes, requests by the lender that they put up some form of security before a loan is issued.

Fair credit ratings are in the middle of the pack. If you fall into this category, you will find that you will have a wider choice of loans and credit cards than people in the categories below you. However, it is almost certain that you will have to pay higher interest charges than people in the higher categories.

People with good credit ratings will be accepted for most loans and credit cards that they apply for. There is a small chance that they will have to pay slightly higher interest charges. Excellent credit ratings are the ones which we all aspire to have. People in this category are almost guaranteed to be accepted for any form of credit and will pay the lowest interest rates and charges.

How to fix a bad credit score

While the immediate situation can seem bleak, it is perfectly possible to repair your credit score with time and discipline. There is no ‘quick fix’ but experience shows that people with poor or very poor scores can get back to good and then excellent within a couple of years. Here’s how they do it:

1. They make their repayments on time

Your financial mistakes will fade over time as long as you start behaving responsibly now. That means making payments on time, every time from now on. Over time, this good behaviour will start to outweigh the late or missed payments on your credit record.

2. Settle accounts

If you have got a bit of money in the bank, consider whether you should pay off a credit card balance or loan rather than splashing out on something new. This is particularly good and viewed very favourably if you’ve maxed out your cards because it will reduce your overall debt to income ratio and will have a pretty rapid effect on your credit score.

3. Get a ‘credit builder’ credit card

Some of the big banks and major financial organisations offer versions of their mainstream credit cards for people with poor credit records. You’ll hear these referred to as ‘credit builder’ or ‘credit repair’ cards and although they will come with lower credit limits and higher APRs than those offered to people with good credit records, they will allow you to quickly demonstrate financial rectitude by repaying a small amount of borrowing on time. This will be reflected on your credit record every time you make the payment.

4. Look at your credit records

It will cost you just a few pounds to get hold of your records from the major reference agencies. It’s worth doing because it will allow you to see where the problem areas are and take corrective action or to turn up any mistakes on your record. If there are mistakes, you should write to the agencies and explain them. The record will generally show your credit score so you will know how much work you have to do.

5. Take out a guarantor loan

This is an excellent way to rebuild a credit score. A guarantor loan will allow somebody who has a bad credit score to use the record of somebody else to borrow money. A friend or family member will stand as guarantor for the borrowing, becoming liable to make the repayments if the borrower slips up. As a result, the lender looks at the score of the guarantor, not the applicant, but every repayment made on time is recorded on the borrower’s record. Over time, this will improve a credit score.

Article provided by Mike James, an independent content writer in the finance industry working together with technology-led finance broker Solution Loans, who were consulted over this post.

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Most of us complain about the constant lack of money for various reasons – small salary or continuous expenses that have already tortured us. In fact, it is quite realistic to prevent those expenses and become financially stable and independent. It is only a matter of time and your wishes. At every age, whether you are young or old, you should remember that the earlier you start to think about financial stability and savings the more confidence in future you will have. So, let’s see what we can do for this from our early 20s to the time of retirement.

Youth without debt

When being young and beautiful we do not consider us to be already grown up but we are willing to make something meaningful for society. It is often occurs that our deeds do not succeed and we make many mistakes. Indeed, financial responsibilities are wide opened for us and we should already think about contribution to our retirement. Small amount of money saved monthly will help to feel stability and consider plans for future as it is a definite time to find an appropriate job.

The next thing that we need to think about except work is credit cards repayment. We should remember that our 20s is not the age to build up debt. Applying for credit cards or even for school loans we have to be sure in our ability to repay all money in time or even in advance. We do not need debts in such an early age.

More responsibilities need more expenses

The most appropriate age to obtain more life responsibilities is 30s. At this age we have more income, create our own family and even may think about our ability to purchase a good house (often with the help of mortgage). This will be a good age for those who refused to obtain debt when they were 20 years old. By the way, our contribution into retirement should be raised.

The right time to invest

The best time for savings and investment comes with our 40s. At this age we have a good job to provide your family with all needs and the age for more expenses. We can easy go wrong being not careful with everything that concerns money. We should save more, invest more and also pay more attention to retirement planning to be sure that it is all right.

Everything goes right in your 50s

When you are fifty everything has to be under control. You have made the needed sum of money and now it works on you. Even often expenses will not prevent your financial stability. Pay off your mortgage and continue retirement funding.

Time for retirement

Depending on when you wish to retire, all plans should be done – the debt is repaid and the needed sum of money is already saved. Then you will see that all your efforts were not in vain.

When creating and following plans for retirement you should understand that complaining on the money need will not bring success in your life. So, get rid of bad thoughts and start to think about your financial stability.

Diana is an accomplished financial consultant writing about socio-economic problems as well as legal and financial articles on debt, bankruptcy, fast loans online, stock market, credit card, personal injury on various websites. She has been writing for the last 5 years.

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