Credit can be divided into two categories: consumer credit and commercial/business credit. Commercial credit is credit, which an individual or a business entity, such as a sole trader or a partner, obtains for business purposes, whereas consumer credit allows consumers to obtain certain objects or amounts of cash that would otherwise have been unavailable to them. It is generally called consumer credit because it is the process of making funds or goods available to an end consumer or an individual for personal benefit.
Managing credit – the right way to do it:
When choosing a credit card, make sure you choose one with the following:
- No annual fee
- Low interest rate
- Long interest-free period and remove e.g. 55 days as credit cards with an annual fee
- A rewards program at no extra cost to you, if available
Always pay off your credit card balance before it's due (with cash and not another credit card!). This will help alleviate any extra interest that could add up and leave you in more debt than you can handle.
Something to watch out for: Never use your home loan to pay off a depreciating item.
WHY?
Depreciation means when something loses value. For example, a car is a depreciating item, as the more you use it, the less it is worth. That’s why it doesn’t make any sense to use your home loan to pay off an item that will offer a limited value. Only use your home loan to pay off items like other property, or rather try not to use your home loan at all, since that way, you may even be able to pay off your home loan faster and save tons on interest.
How a DirectAxis Personal Loan could improve your credit status:
If paying off your retail accounts and credit cards is leaving you with less money than you'd like at the end of every month, you could take out a Personal Loan from DirectAxis, and use it to consolidate all of them. This will leave you with just one, more manageable payment to make every month - and will reduce the risk of being blacklisted for not meeting your account or credit card payments. Use our Account Consolidator to work out the total amount of the outstanding balances on your credit cards and accounts, and then apply for a loan amount that will cover them.
To apply for a Personal Loan from DirectAxis:
Click here and we’ll call you back!
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