Over 400 million credit cards are circling the United States, and Americans are piling debt upon debt for items they do not necessarily need and may not even want. But, it is culturally appropriate and common. It can also lead to some widely reported issues in borrowing.
Credit Cards Exist Forever
The dilemma with credit cards is on both ends of the borrowing. What this means is that credit limit caps are more suggestive and can change, while borrowers can continue to add debt to an open card whether they back it back or not- for a time, that is.
A credit card is like a loan that never goes away. It is always open, and items can be charged to it no matter how large the current payment is. The credit card companies only demand a minimum payment. It is low for a reason. This is because it keeps the credit card open and active, knowing that if it is open, then consumers will use it. They will add more than they pay, generally, and the loan exists indefinitely.
The Minimum Payment Hole
It is a nice trick because it seems that the consumers benefit from having their credit limit boosted or having a low minimum that they can manage. Unfortunately, it creates a constant cycle of payment. Small business loans are structured with a clear cap and a clear minimum. The minimum is manageable, but it isn’t anything. It is enough to alter the loan and to pay it off, which is the ultimate goal.
The small consumer loans are paid off in a reasonable amount of time. Unlike credit cards, they are not indefinite. In a perfect world, no one would need to borrow anything. But, small consumer loans do not have many of the trappings that are common with credit cards.
MaxLend Loans opts to offer terms that will not just sporadically change based on how the loan is going. What a borrower gets is what they get. It is safer and more sensible for everyone involved. It also covers borrowers who are perhaps adverse to small consumer loans and are more comfortable with credit cards.