If one wants to make a significant purchase, one has to make an either/or choice. Should one pay cash or with credit? Savings or borrowing? Today or tomorrow? For many people, saving up for a purchase is the best course of action. 

Despite common misconceptions about the Bajaj Finserv Card eligibility, experts report that there is no one-size-fits-all answer to whether to use credit or cash.

Buying a big-screen television or washing machine without debt is often wise because the interest added to the purchase price is avoided. However, how will you deal with the situation if your washing machine just broke down and you need it right away? What would you do if the washing machine’s price rose more than the interest charged to charge it after a year of saving? How about if the store offers no money down and 0% interest for 12 months and the washing machine is on sale?

Pay cash

The financial crunch can sometimes prevent you from taking on more debt, so you have to wait to buy something outright. Even if you can finance a large purchase, it may be best to wait until you have the funds in hand before making the purchase.

A big-ticket non-emergency item can sometimes be negotiated at a better price if you pay cash. A bargaining tool with a long history, “cash upfront” is a tried-and-true method of getting things done. Despite not particularly attractive interest rates on savings accounts at this time, any interest coming in is better than interest going out, which makes saving a somewhat more attractive option than going into debt. Saving for a down payment on big-ticket items, like a car or a house, gives you the ability to get a smaller loan and minimize your borrowing costs.

Charge now, pay later

You can have the best of both worlds in one way. If you charge a large purchase to a credit card and pay it off immediately or within a specified promotional interest-free period, that’s what you’re doing. Using a Bajaj Finserv Card Eligibility or card to charge large purchases and pay off the balance immediately or within a promotional period free of interest is what you’re doing. 

Rewards may include airline miles, points, or even a cashback. Adding these rewards to your discount would still eliminate interest payments. In addition to extended warranties and travel insurance, credit cards generally come with consumer protection benefits. To gain the benefits, pay off the charge immediately and charge the purchase.

Manage debt smartly

The importance of not maxing out your Bajaj Finserv EMI Network Card and bank accounts cannot be overstated. The advantages of any savings can quickly be wiped out by late fees, over-limit fees, and other costs. You should avoid skipping out on your payment plan because you want to make room for another large purchase. Credit can quickly become suffocating debt because of this access to credit.

Don’t pay off the balance before the end of the month or after the zero percent interest period has ended unless you have enough in the bank to pay it off. Avoid charging the purchase if you cannot pay it off.

Know your interest rates

In cases where a purchase is likely to appreciate in value, going into debt now may be justified. College education or the purchase of a home as examples. You should follow this same principle if you decide to borrow funds rather than withdraw them from investments, savings, or a retirement account. When borrowing is the only option, long-term gains on savings or investments, not to mention the potential damage that could be done to a retirement account, can often justify the decision.

When interest rates are extremely low, purchasing on time might be better. This is particularly important if you think interest rates will rise significantly before saving enough for the purchase. Just be mindful that if you’re using a credit card, the annual percentage rate of interest may be double digits – which isn’t low.

You should follow this same principle when you borrow funds rather than withdrawing them from investments, savings, or retirement accounts. Long-term gains in savings or investments and the potential for damage to a retirement account can often justify borrowing when borrowing is the only option available.

Purchasing a home on time might be better when interest rates are low. If interest rates are expected to rise before you can save enough for a purchase, this is critical. Remember that using a Bajaj Finserv EMI Network Card can result in a high annual percentage rate of interest – and this isn’t at all low.