Looking At Credit Differently

Category: Finance, Credit.

If you re already unemployed, don t beat yourself up.

It happens to the best of us and it often happens more than once. You re in good company. Now that the unwanted event has arrived, if you ve established savings, regardless of the amount, and you have some available credit lines, you have two tools that will be a big help to you to get through this time without damaging your credit. Prospective employers often pull a credit report as part of the employment process, so to maximize your chances of getting a job, you want the best credit you can realistically have. Using a combination of credit and cash you can put together a new plan that includes finding that new job and a budget/ spending plan that works while you do so. Stay away from cash advances! Even if it seems silly, using the card to buy a$ 10 item is better for you than using a$ 10 cash advance.

The cost to spend money this way is much greater than using the credit card to pay for it. Cash advances come with an extra fee, often have a higher interest rate, and often have a maximum lower than your credit limit. Now that you ve shifted from spending to conserving your resources, your credit- use priorities have shifted. Looking at credit differently. You need to recognize this up front by looking at credit differently. You also used it for larger purchases that you needed some time to pay off.

Originally, you used credit to spend your income in a different way from carrying around your paycheck in your pocket. When you re unemployed, possibly for a very long time, you don t have those earnings coming in( you may have a severance package or unemployment benefits, but they re only temporary- and they may not last as long as your unemployment does) . This is just about the opposite of what most people will tell you, but you ll do this only for a limited period of time and for a specific, worthy purpose. Now you can use credit for basic living and job- hunting expenses only. If it helps, think of it as borrowing money to invest in a sure- fire investment: yourself and your future. This advice may be the opposite of what you ve heard in the past. Preserve your cash for as long as possible by using credit first.

Conventional wisdom says to control expenses by paying cash for as much as possible. Pay with credit for essentials as much as possible and save the cash. The opposite is now the case. You ll keep your overall spending to essentials by closely following a budget.

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