Credit options – what’s available and what to consider?

Most of us have experienced times in life when cash is tight, we Brits refer to this as “being skint”. During such times, there is nothing worse than a large, unexpected bill landing in your lap. Trying to work out how to pay for, say, your car or washing machine to be repaired can be super stressful. Similarly, turning down social opportunities because you don’t have a way to pay for it at that moment can be tough. Trust me, I’ve been there.

Both of these scenarios may lead someone to need to borrow money (aka taking out credit). And many different factors will bear on one’s options in this area, major variables being employment status and credit score.

Traditional credit options

Traditional means of credit that someone might consider include bank account overdrafts or a credit card. I will not go into the pros and cons of these two credit options in this post. Rather, let’s assume these credit lines are not available to you. What happens if you’re already in your overdraft and can’t apply for a credit card due to a poor credit score, for example? Most of us have heard of, and you may even have experience of payday loans. But they have a bad reputation and are typically associated with extortionate rates of interest. If you are interested in a payday loan alternative then you may wish to consider Polar Credit.

Why Polar Credit?

What Polar Credit offer is a simple application process, quick access to the cash (assuming the loan gets approved), a clear repayment structure and a reasonable rate of credit. What I personally like best about Polar is that they reward responsible borrowing by reducing your interest rate by 10% after a year of on-time repayments, then reducing it further by 5% every 6 months until it reaches 29.9% pa.

Final thoughts on credit

Taking out credit is not something that should be taken lightly. Far too often we hear about people who get into vicious debt cycles, paying off one line credit by taking out another. This is something to be mindful of as it can be deeply damaging to your mental health. If you are already struggling with debt then you should seek help from an expert, with a good port of call being your local Citizen’s Advice Bureau.

For me, credit can be a useful tool providing it is used wisely. For example, if you’re tight on cash today but really need to pay for something tomorrow, knowing full well that you will have the cash to pay back the credit (and importantly the interest) in instalments over the course of a few months then that’s a good example of where credit can be handy.

So please take all of this into careful consideration. I truly believe we, as a society, need to remove the stigma associated with talking about our finances. If you’re unsure about whether credit might be right for you then ask for some impartial (ideally professional) advice.

Disclaimer: this article is for information purposes only and does not constitute financial advice.