When it comes to using a credit card you should always only spend what you can afford while paying off the balance in full each month. Otherwise, you pay some ridiculous interest rates that can leave some people in debt forever. Recently a bank has been offering me pre-approved line of credit with the pitch of the interest rate being much lower than a credit card. They were even offering me $10,000 of credit and the interest rate was 10.73%.
In comparison, they mention that the interest rate on the credit card is 21.99%. That sure adds up. But of course, I have no need for this line of credit nor do I ever pay these interest rates. But it is a good reminder on how much money you lose if you are trapped paying interest rates every month that just add up if you don’t pay it off. In that case, I would rather try and work more jobs or generate more business revenue versus borrowing money from a bank if I really need more funds.
With how much you pay I can easily see one becoming like an employee for the bank except you literally pay them. I actually do wonder why they would even send these kinds of offers to a person like myself. I remember an employee at a bank was pitching me to sign up for a line of credit with the pitch being it’s nice to have in case say you pay a bill without actually having enough funds in the account. But if you think about it, the bank would probably get way more too.