Why Having Credit Doesn’t Mean You’re Irresponsible Or Headed For Debt

There’s a huge misconception around credit and debt that seems to say that having credit is a bad thing, it somehow means you’re not good with money, or that you’re headed for financial ruin through being tied to debt, and this simply isn’t true. If someone is bad at managing money, then they’re going to be bad at managing it whether it’s borrowed or they earned it.

The same goes for people who are good with money. Of course nobody wants to be living in debt, and it’s true of our society today that many people do have some kind of debt, and a lot of people use some kind of credit. There are lots of resources and support out there for getting out of debt, so that really just starts with a decision to no longer have it in your life, but having credit and being in debt are definitely not the same thing.

If you can manage money responsibly, then the ability to obtain credit can be a wonderful thing and can really help you. If you pay things back on time, then not only do you have increased flexibility and lower interest rates when borrowing more, but you also improve your credit score with loans that you pay back on time through places like Enness Bridging Finance and are creating a financial cushion for emergencies if you need it.

Here are just a few ways having some different types of credit really helped me out when I needed it.

CREDIT CARD

Having a credit card allowed me to make some investments when I started a business a few years ago, and had I not had credit available to me, it would’ve taken me a lot longer to get the things in place that I needed to start making money and keep on investing. Now, I’m not an advocate of things like going into debt if you can’t afford to, or you know there’s no chance you’ll be able to pay it back, but because I knew I could, then it really helped me get things done quicker.

PHONE CONTRACT

When I recently moved, I needed a new phone because my beloved iPhone gave up on me. There was no way I could afford to pay the hundreds up front for a new phone, so I decided to apply for a contract and was given one. Now because I pay monthly bill on time, I’m able to use my phone for work like I need to, and I’m also benefitting my credit score by paying back on time.

FLY NOW PAY LATER

Recently I needed to fly to the US, and I wasn’t due to get paid for another few weeks. I didn’t want to use my credit card for this purchase, because it would go over my current limit, and I try to never do that, but I also wanted to get the flight deal I had seen and knew that if I waited until I got paid that the price would go up massively, so I found out about a service called Fly Now Pay Later, which is essentially what it says. You choose your flight, and then choose them as the payment option. They then have you fill out an application with them to pay your flight in installments of between 3-12 months. If you get accepted, you pay a small 10% admin fee from the flight cost, and the rest is spread out. They accepted my application and gave me a very generous credit limit. Now, because I pay them back on time, I have that credit, which increases, at my disposal anytime I need it. Although I don’t use it often, it’s certainly nice to have it in emergencies if I ever need it.