Should You Use Credit?

Your goal as a consumer should be to establish a strong credit history. Doing so affects many aspects of our lives such as buying or leasing housing, using utilities, even applying for a job. Those with a good credit history demonstrate their trustworthiness and responsibility.

You should use credit if:

  • You’re able to limit your credit spending to no more than 15-20% of your take-home pay.
  • You’re looking to establish a credit history (if you have not used credit in the past).
  • You need to make a large purchase such as a home, appliance or a college education.

You should NOT use credit if:

  • Your employment history is unstable which may make it difficult to keep up with monthly payments in the event of an emergency.
  • You’re a habitual spender and have trouble living within your means.
  • You’re using credit to pay for “basic necessities” such as food, utilities, doctors’ bills, etc. as a result of overspending on non-essentials.

Your decision to use credit should be weighed carefully. Your goal should be to spend no more than you can afford. If you are just beginning to use credit, it would be wise to keep your spending within 10-15% of your take-home pay (net income). Your decision to use credit should be based on your current financial obligations and your financial plans for the future.

Credit Tips from OneMain Financial:

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Related Services – The following directories of companies and services offer a wide variety of financial programs to assist you with handling your debts. Consolidate your bills with a debt consolidation loan or use a debt management or credit counseling service for help with your credit card bills and other payments:

  • Debt Settlement – Are you finding yourself unable to meet your monthly budget because of too many credit card payments? Negotiating your debts may or may not be the right choice to get help with your financial situation. Compare programs designed for helping people with similiar debt problems.
  • Personal Loan Credit – Need a smaller loan for the consolidation of your credit cards? Personal loan credit is typically unsecured and does not require you to provide security in the form of your assets, such as your car or other personal assets.
  • Credit Debt Management – Having trouble keeping up with your minimum monthly payments? Review various services that may be able to help you get control of your individual finances and manage your debts.

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