If you have never thought about opening up a line of credit from a bank, credit union or lender, then you might find that it’s a good idea to do so. These are some of the main benefits that you can enjoy if you choose to do this.
First of all, one good thing about having an established line of credit is the fact that you will have access to money when you need it. As long as you haven’t borrowed your total approved amount, you can borrow money without having to worry about reapplying. If you find yourself in an emergency situation and need extra cash, you’ll know that you can handle the situation easily. This can help reduce your stress levels and can make it easier for you to handle emergency car or home repairs, medical issues or other situations.
2. Only Pay Interest and Fees on What You Use
Unlike with some types of credit cards, which require you to pay an annual fee whether you use the card or not, you do not have to worry about paying interest and fees on the money from your line of credit unless you use it. This means that you can avoid paying any more in fees or interest than you have to, all while having the benefits of having money available for you when you need it.
3. Build and Maintain Your Credit
If you do not have an open line of credit or any type of credit card, you might like the idea that you aren’t in debt. However, one thing that you do have to worry about is your credit score. If you don’t have any type of loan or credit card, then you aren’t building your credit. This means that when you need to take out a loan or otherwise have to undergo a credit check, you might not get approved. Even if you do get approved, you might have to pay more in interest.
After getting a line of credit, if you use it responsibly, you can build your credit. Then, once you have established a good credit score, having your line of credit will help you maintain your score. This can make it easier for you to get approved for things in the future, such as a mortgage or car loan, and it can save you a lot of money in interest.
As you can see, opening up a line of credit can be a good idea for a few different reasons. Once you open up a line of credit with a lender, you will be able to enjoy these three benefits and more.