Global Real Estate Highlights

Credit cards are more popular than ever, specially for the younger generation. It is like carrying cash in your wallet giving you the pretense that you have more money than what you actually have. It also makes it easier to purchase the goods now, take it home and pay for it later.

It sounds very simple and easy to do. The use of credit cards make it so easy to purchase just about anything. However, the difficult part is paying for it, which is no secret to a lot of people too.

Lately, more merchants are offering “Buy Now, Pay Later“, with some offering up to 18 months interest free. I think it is a good deal if you have the future income, savings and discipline to pay off the debt in time. Otherwise, you’ll be surprised how a $10,000 debt can take up to 31 years to pay, as explained in this news article.

It is alarming that most merchants offering this “legal” payment scheme are selling furniture and electronic goods. Big ticket items that an ordinary consumer can’t normally afford, if he had to pay it in cash. This helped boost the sales for the merchants, but it also led to an increase in unpaid credit card debt as reported here, here and here.

Moreover, people are not only using their credit cards to furnish their homes, but even to renovate it. A few weeks back, I saw a couple on one of my favorite TV shows “Grand Designs“, who blew their budget in their renovation project. They decided to borrow against their credit card. The house came out nice and just how they envision it.

However, I would advise any potential renovators not to borrow against their credit card, especially with the cash advance feature. It can easily throw you out of budget, induce mortgage and financial stress or worse; face foreclosure with the house you lovingly renovated. You might as well take out a loan you can afford which has a lower interest rate.

I’m not being pessimistic, but financially I would always go for the practical and logical side of things. If I can’t afford it, I would not buy it. I could still dream of getting it one day, which is something to look forward to, than wish my financial ruins is just a bad dream.

Overall, I would still encourage you to follow your dreams in building and creating the house that you love. However, make sure your budget permits it, including allowances for any unforeseen expenses. Learn to compromise, be more creative, be patient…do whatever it takes to stick within your means. In the end, you will enjoy your house more, if you still have the money to pay for the mortgage and all the other creature comforts that make it a home.

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