Personal Finance Daily: More ‘buy now pay later’ users are seeing their credit scores drop after they miss payments and 7 financial commandments you can…

By alexandreFinance

Personal Finance Daily: More ‘buy now pay later’ users are seeing their credit scores drop after they miss payments and 7 financial commandments you can…

The use of “buy now pay later” services has become increasingly popular in recent years, with many consumers taking advantage of the option to defer payment on purchases. However, this trend has also led to a rise in missed payments and a subsequent drop in credit scores for those who use these services. Additionally, financial experts recommend following certain principles when managing personal finances, which can help individuals achieve financial stability and success. In this article, we will explore these two topics in more detail.

The Risks of “Buy Now Pay Later”

The convenience of buy now pay later services can be tempting for many consumers, but it is important to understand the potential risks. One significant issue is that missed payments can quickly lead to a drop in credit score, as many of these services report to credit bureaus just like traditional lenders do. This can have serious consequences beyond simply being denied future credit applications. A lower credit score can make it harder to rent an apartment, obtain insurance or even get a job.

In addition, some buy now pay later services may not disclose all the terms and fees upfront, leaving customers surprised by unexpected costs. It is important to carefully review any contract or agreement before signing up for one of these services.

To avoid these risks, it is wise to only use buy now pay later services for purchases that are truly necessary and within one’s budget. Additionally, it is crucial to make payments on time and in full each month to avoid any negative impact on one’s credit score.

The 7 Financial Commandments

Financial success is not just about making more money; it is also about managing your money wisely. To achieve this goal, many financial experts recommend following certain principles, sometimes referred to as the “7 Financial Commandments.” These include:

1. Thou shalt live below thy means

Living within or even below one’s means is crucial for financial stability. This includes budgeting carefully, avoiding unnecessary expenses, and living frugally when possible.

2. Thou shalt save for thy future

Saving for the future is essential for achieving long-term financial goals. This may include establishing an emergency fund, saving for retirement, or planning for major purchases such as a home.

3. Thou shalt avoid debt as much as possible

Avoiding unnecessary debt can help individuals avoid financial stress and achieve greater financial freedom. When borrowing is necessary, it is important to do so responsibly and with a clear repayment plan in place.

4. Thou shalt invest wisely

Investing can be a powerful tool for building wealth over the long term. However, it is important to do so intelligently, taking into account one’s risk tolerance, goals, and time horizon.

5. Thou shalt protect thy assets and income

Protecting one’s assets and income is important for ensuring financial security. This may include obtaining insurance coverage, creating a will or estate plan, and taking steps to prevent identity theft or fraud.

6. Thou shalt stay informed and educated

Staying informed about financial news and trends can help individuals make better decisions and take advantage of opportunities. Additionally, ongoing education and skill development can lead to higher earning potential and greater financial success.

7. Thou shalt give generously

Giving back to others can be a source of personal fulfillment and can also have positive financial benefits, such as reducing tax liability.

By following these principles and being aware of the risks associated with buy now pay later services, individuals can make smarter financial choices and achieve greater success over the long term. While there is no one-size-fits-all approach to personal finance, taking a proactive and mindful approach can help anyone achieve their financial goals.