Credit

A credit is not "free" money. When you pay on credit, you usually incur additional expenses compared to paying in cash. Because of these expenses, you always end up paying back more than you originally borrowed.

A credit involves more financial risks than cash.

• The market interest rates linked to the credit may rise.
• If you don't amortise the loan by the due date, the creditor is usually entitled to charge you penalty interest and notification expenses
• An unpaid credit may eventually result in a bad credit record. Having a bad credit record can make your life difficult in several ways. It may prevent you from obtaining further credits or a credit card and from entering into agreements to pay for purchases in installments. You may also have trouble getting a rental apartment, a job, or even a mobile phone subscription.

Collateral for credit may include an apartment or other property. If you fail to pay off the credit as agreed, your creditor may demand that you sell off the collateral. Credit with collateral is less expensive than credit without collateral.

However, a credit card is sometimes a safer payment method than cash. If you pay for a product or service with a credit card but do not receive the product or service from the seller, nor a refund, you are entitled to get a refund of the purchase price from the credit card company.

Several small credits or one large one?

The more credits you have, the more expenses you incur. Try to arrange for your small credits to be combined into one bigger credit, and you will find it easier to manage your personal finances. In addition, your credit costs will decrease when you only pay the costs of one credit,

You can also save in credit costs by paying off the whole credit earlier than agreed.

If you want a new payment arrangement, you must discuss the matter with your creditor. If you need help, do not hesitate to turn to a financial and debt adviser .