When Is Revolving Balance on Your Credit Card a Good Idea

There are certain situations in which the loan facility on a credit card comes in handy. Although as a rule it is advised to the customers to pay down the balance every month in order to avoid paying extra money as interest and financial charges there are times when using the same facility can work out to your financial advantage.

Several credit cards offer the facility of breaking down the payment into monthly installments. Sometimes the same credit cards has struck a deal with certain retailers in which the event can be broken down into an interest-free installment. As long as this does not tempt you to make a purchase that is not required, this is a very convenient setup where you can make the purchase of an essential commodity that you require. It also involves the least amount of paperwork and enables you to buy something that you really need but would not have been able to afford to if you had to make the payment all at once.

If the interest-free installment agreement does not exist with the retailer many credit card companies offer the same service of breaking down a certain charge into monthly installments by charging a minimal interest rate such as eight per cent per annum. For making a purchase of something that you need such as an air-conditioner or an LCD television you can break the payments down into installments for is less the six months without having to pay very much in terms of interest. What this kind of an arrangement does is that it allows you to make a substantially large purchase of a commodity that you require but could not afford. This arrangement also reduces the burden of the expense on an expensive quality were breaking it down into easier smaller monthly installments. But the best part probably is that the interest rate of breaking the payments down into installments is much less than what the credit card company usually charges on a regular credit card balance that is being revolve from one month to another.

Find out if your credit card company offers such a feature. If it is available on your credit card than you can use it to make the purchase of a certain essential item that you have been needing to. Just make sure that this expense is a much-needed expense and not something frivolous that will make you spend money just from the temptation of being able to break it down into installments.

There is another service that certain credit card service providers offer and it is called cash on demand. This feature allows a customer to request a certain amount of cash to be deposited directly into their account to be used for whatever purpose and team necessary. This amount will then be broken down into installments and charged on the credit card statement every month. There is usually an interest that is levied on this kind of a transaction and is usually a more expansive arrangement than the one mentioned earlier where you get to break a certain transaction into monthly installments.