It’s becoming more and more common to hear about people taking out a loan not because they need to cover an urgent expense, but rather because they want to purchase something extra in their lives. It may be a new gaming computer, TV set, or even a car – the point is, it’s not rare at all to see people getting themselves into debt for things they don’t even need in any urgent way.
This is becoming a huge problem in some places, and even if you have a generally responsible attitude to your finances, you might still occasionally find yourself tempted to go for a deal like this. After all, it’s often not even presented as an actual loan, but rather something like a financing deal for a new smartphone. The right choice of wording can make the deal seem much less problematic than it truly is!
You’re Making Your Financial Situation More Difficult
The number one reason why this is a bad idea should already be obvious. If you can’t afford the new purchase in the first place, this means that taking out a loan without a credit check for it will only make your financial situation more challenging. This is not something you want to do without a good reason. Think about it – a loan is meant to be a tool for getting yourself out of a tough financial spot. With that in mind, it also comes with a few strings attached that can make your life uncomfortable for the duration of the loan.
It simply doesn’t make sense to go down that road for something that you can comfortably live without. And no, upgrading your smartphone is not an urgent expense. Not if you can still run all your needed apps on the device you have right now anyway.
Impulse Purchases Can Get Old Fast
Buying new things can quickly turn into an addiction. It might sound exaggerated, but many people are actually dealing with this problem right now. The number will probably keep growing too, looking at current trends. You need to be careful with how you approach your shopping habits, and always make sure that you’re not jumping on a purchase simply because it looked enticing at first.
And like any addiction, the deeper you go into the hole, the more difficult it will become to satisfy your cravings. You’ll want more and more expensive things on a regular basis, and you’ll find yourself deeper in debt as a result of that. This might sound exaggerated, but you’d be surprised how many people are actually paying off significant amounts of debt just because they’ve gone down that exact road.
You’ll Enjoy Things More When You Know You’ve Earned Them
There’s also the other side of that coin – certain types of possessions are simply more enjoyable to have when you know that you truly deserve them. Getting into debt for something is the exact opposite of deserving it. But when you turn on that new TV and kick back in your sofa knowing that you don’t owe a single cent for it, this can be an extremely rewarding feeling. Compare that to the guilt creeping in the back of your mind every time you use something you’ve bought on credit, and you’ll start to see where this is going.
On a related note, if you decide to eventually sell something you’ve bought, you’ll take a much bigger hit if the item was bought on credit. You may not even be done paying it off yet! It’s actually not rare to see people selling cars that they are still making payments on. This can mess up your financial situation quite badly, so be careful not to get yourself into a mess like that.
There’s Probably a Better Deal Around the Corner
Last but not least, remember that many expensive items can often be purchased for a much better price if you know where to look, and have a little extra patience. Sure, you might have to wait a week or two, perhaps a bit longer. But sooner or later a better deal is going to show up. And if you’ve already bought the thing by taking out a loan, you might even feel a bit disappointed when you see the attractive new price.
Plus, if it’s a new product, you’ll also have some time to wait for reports about its quality to come out. It might turn out that it has certain flaws that were not immediately obvious when it was first released. This is a side benefit of avoiding impulse purchases. You’ll have all the time you need to read and compare product reviews, user opinions, and other similar points of information.