fbpx App Store Google Play
ALERT: Help Us Prevent Financial Fraud   Learn More

How To Pick The Perfect Payment Method For Your Purchase

You’re ready to buy a new car, home, or golf cart. Or maybe you have to replace your roof or HVAC, but you don’t know how to pay for it. While there are many ways you can pay for these purchases, it’s important to know which method to use for which purchase. Launch experts explain below the best time for using financing, credit cards, and savings.

Personal Loan

It’s recommended that you use a personal loan for larger purchases

Low interest rate/APR.

Set end date and amount pay back (With a credit card there is revolving interest and no end date).

Fixed monthly payments.

Better for your credit rating.

Useful for purchases like roof replacement and HVAC.

Check out more ways you can use a personal loan.

Revolving debt is much more damaging for your credit score than installment loans due to the “revolving utilization” ratio that the credit bureau looks at. That is because personal loans have fixed monthly payments that you agree to when you take the loan. To learn more about credit utilization, click HERE.

Credit Card

It’s recommended that use a credit card with smaller purchases

Does not impact your credit like a large purchase would. (Unless you intend to pay it off by your next statement).

Pay 0% interest by paying off your balance each month.

Creates a “credit mix.” Having both installment and revolving credit shows lenders you can manage different types of credit accounts. 

Learn how credit card interest rates work HERE.

Savings

It’s recommended that you use your savings for emergencies

You reach the amount for a specific purchase you’ve been saving for. Example: You have saved $2,000 for vacation. You set this money aside for vacation so use the funds for that.

True emergencies (car repair, vet emergency, medical bills, etc.)

Do NOT use savings for paying off debt or making large purchases. If you deplete your emergency fun and an actual emergency arises then you may have to rely on credit cards. This in time will increase your debt and lower your credit score.

If you’re unsure of which route you should take for your next purchase, reach out to Launch CU and speak with one of our member service representatives.

Related Posts

September 18, 2023
Defend Against Smishing and Spam Texts In this blog, we'll explore how to identify smishing and spam texts, provide some examples, and offer strategies to stop them.
September 12, 2023
8 Tips for Creating Secure Account Passwords Weak passwords are one of the leading causes of data breaches and identity theft. We've compiled eight essential tips for creating strong account passwords.
July 25, 2023
How to Start Building an Emergency Fund Here's our step-by-step guide to building an emergency fund. Take this financial step to protect yourself from unexpected expenses.
Visit any branch location to open your account. For questions call 321-455-9400 (inside Brevard) or 800-662-5257 (outside Brevard).
Back to top