Paying your bills on time is very important because it reflects that you are managing your debts. Through lender reporting, the major credit reporting agencies are able to know the current state of your debt management, and whether you are paying the bills or not. A payment history or payment performance is a record that is established by paying or not making payment of your bills on time.
If you do not make the payment of bills, you are hurting your credit score and history. In addition, you are being subjected to high interest rates on your cards. High rates coupled with diminishing score means that you are getting off the financial track and you may find yourself in financial pitfalls. About 35 percent of the points that you accrue in your FICO credit score come from the payment history.
In order to be able to ensure that you are not dropping off from the prime and above prime score, you should pay the bills in time. However, since at times you may be confronted with financial problems that need immediate and urgent resolving, you could find yourself not able to make payment for the monthly bills such as electricity, gas, telephone, and other regular bills. If you find that you cannot be able to repay the bills, you can seek for alternative source of cash such as cash advance to clear the bills.
One reason why you would go for cash advance is that it will protect your credit card from the hefty fees and hiking of interest rates. A first time failure to make the payment in time may not hurt you, but be assured, if it becomes a habit, soon you will discover that you are problems. The interest rates attached to your card can go up as high as 35 percent. This means that any debt you have in future will be paid on such rates. This can be very devastating to your future borrowing. This is why you see consumers obtaining new cards in order to lower the interest.
In addition, when you do not make payment on time, you are giving a bad impression to the card issuers. This may mean that when you want to obtain credit facilities, you have difficulties. Cash advances can help come out of temporary financial challenges you are going through without damaging or harming your score. They are an easier way of resolving urgent financial matters that you cannot be able to resolve using your card.
Nonetheless, you should make sure that you settle the cash advance debt in time so that you do not get into a circle of debts. When you start to accrue another debt through cash advances, it means that you may not be able to repay the regular bills and your debts in time. This can disorientate all your financial abilities and plunge you deeper into financial problems. The cash advance you obtain needs to have lower interest rates and payable within a realistic timeframe. Some forms of quick credit cash can be harmful, and you should have a second though about them.