For most Czechs, Christmas is the most financially demanding time of the year. This shows an increased interest in consumer credit in banking and non-banking institutions. Czechs are on average due to Christmas due to the amount of around ten thousand crowns and more. This is not just about buying Christmas gifts, but also about the increased costs of food and drink.
Christmas is an annual symbol of not only peace and quiet, but also increased spending. People buy gifts, groceries and plan trips for the holidays. People around the Christmas season also use electronics, household appliances, furniture or even a car. According to some surveys, one in eight Czechs has already borrowed Christmas presents in the past and more than a quarter of people are considering negotiating a Christmas loan, at least a credit card is drawn.
Do I need a loan?
According to financial advisors as well as psychologists, loans should be used to buy only those things that we absolutely need. There is no point in disproportionately indebted and due to a nice Christmas Eve then unpleasant the whole year. However, practice also shows that many households cannot afford this because of insufficient financial reserves. Surveys say that one in five Czechs has been in a situation where one had to borrow money because of lack of finances after paying current payments.
Experts in the pre-Christmas period often recall that only each credit card payment is a debt payment. The credit card is also the original debit card for which an overdraft has been agreed, which is again a loan. When a person wants to draw a loan, a credit card is more suitable than a debit card, because the credit card is always set so-called interest-free period, when the drawn credit is not interest. It usually takes about 50 days from the time it was paid by credit card. The overdraft debit card does not offer this advantage. On the other hand, the debt bears interest on its owner from the moment it is incurred until it is paid.
Beware of microloans
But at a time when Christmas can not be “bought” without a loan, it is necessary to stick to clear principles when negotiating a loan. The first step before any arrangement of any loan is to properly orientate yourself in the current market offer and orientate in the total cost of the loan. It is important to know how much money the loan will be overpaid and for how long.
Equally important is to know what will happen if the client is delayed even with only one installment, because only because of this can significantly increase the cost of the agreed loan. In this respect, advisors warn against microloans, which are very expensive, although it may not seem at first sight, because the client borrows only a small amount.
How to properly arrange a loan quickly and easily
- In the first place , think carefully about whether you really need a loan. If you find you don’t need it, don’t take it.
- If you need a loan, be clear on what conditions banks and non-banking institutions currently offer loans. You can get started on the Internet, where online price comparators of financial products are available with expert assistance, which is intended to close the loan with you.
- Ideally, always borrow money from your bank. For non-banking institutions, such as repayment companies, the cost of credit is always slightly higher. The reason is that non-banking institutions are less lenient in meeting the conditions for obtaining a loan, which they also charge with justification for the higher risk of the client. The fact is that, in practice, non-banking institutions are mainly approached by those whom the bank did not lend money because of existing loans.
- Beware of credit cards! Every credit card payment is a credit draw. In addition, payment card systems are so sophisticated that they can now automatically distribute the drawn debt into installments. It will depend on the card user whether he / she wants the amount paid by the card to be “written off” immediately and in whole or gradually in several installments.
- Credit cost calculated at APR rate. The interest rate basically gives us the percentage of the money we borrow. However, this price does not include any additional fees that the institution may charge in addition to the establishment, maintenance and termination of the loan. The sum of all these fees and interest rates is taken into account by the APRC or the annual percentage rate of charge.