Besides the traditional loans, you may want to opt for credit, common types of credit are a line of credit, an overdraft on your account, or a credit card.
Common types of credit:
Line of Credit
- A Line of credit is often linked but separate from your bank account depending on the financial institution you do business with, when you have good credit standings you can negotiate much better rates.
Bank Account Overdraft
- An overdraft on your bank account is often offered to you when you are in good credit standings or when you have strong capital. An overdraft on your bank account should only cost you when you are using it.
- Credit cards are offered from from several different financial institutions leaving consumers with so many options, leaving you the luxury to really look around to see what card suits your needs best, considering you have good credit standings.
Things to Consider When Signing up for Credit:
- Your financial needs, does it make sense to sign up for credit?
- How often you apply for credit, if you are frequently turned down, it shows up with each application, be weary of applying for too much credit and not being accepted, it does not reflect well on your overall financial standings.
- The limit, how much you are comfortable borrowing.
- The Interest rate, is it something you can maintain?
- Balance computation method, how will unpaid balances be calculated over time.
- Penalties and fess, know what happens if payments are late or not made.
- Customer incentives, often credit cards and other credit products offer client incentives, shop around you may be entitled to vacation rewards, free gas or groceries or even cash back to put back into your business.
*Rates and conditions on all financial products, change frequently so ensure you have a contact on hand, (that you are comfortable with) of the financial institution you do business with so you can keep up to date and have your questions answered when they arise.
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