Is Personal Debt Always a Bad Thing?

Personal debt has a bad reputation.

Personal debt for most people is almost an evil creation. Is it so bad? Are there times in which it makes sense to go into debt? When your life would be better off if you had access to debt, rather than not?

The answer is yes. Personal debt can, at times, be a good thing.

==> It Can Be a Lifesaver in an Emergency

Having access to credit can be a lifesaver if unexpected expenses pop up.

If you crash your car and it needs repairs, and you don’t have the cash in the bank, having access to credit cards can make all the difference in the world.

You can keep them in a drawer.

==> Use Debt for Professional Development

If you use credit cards to purchase objects that at the end of the day result in earning you higher pay, then you’ll end up financially better off than if you didn’t have the debt.

For example, if you have a series of job interviews lined up, you might want to go and get a high-quality suit. Will help you make a sharper impression.

The suit’s going to cost money, possibly a lot of money – money you don’t have now. You can use credit cards for that. At the end of the day, if you land the job, it would have been worth it.

==> As a Tool to Launch Businesses

Fact, more businesses are launched with a Visa or MasterCard than any other source of financing. That’s right – bank loans, private investments, and venture capital don’t come close to the regular household Visa card.

If you’ve ever considered launching a business, you’ll want to have a few credit cards around to help smooth out any initial investments.

==> It’s Important to Build Credit

To build a credit history, you need to take on debt. Creditors want to know how responsible you are with debt. If you never take on any debt, there’s no way for them to know.

Even if you don’t think of yourself as a “person who uses credit cards,” it’s still essential to building up your credit rating.

When you buy a car, the difference between good credit and poor credit could be several percentage points – worth thousands of dollars throughout the loan.
Most people must take a loan out to buy a car because the car of a decent car that will run, is beyond most people’s ability to pay in cash.

When you buy a house, the difference could be even more significant.

The American dream is to buy a house. If you think that at some point in time you want to buy a home, then you will need to have a good credit rating.

==> Personal Debt is not a bad thing

As you can see, personal debt is not always a bad thing.  Therefore, it can be used to improve your life and better your finances.

In conclusion, debt isn’t something to be shunned; it’s something to be used intelligently and sparsely.

Make sure you use it wisely and have a plan to pay it off personal debt. Read this article, Good Debt vs. Bad Debt. 

Don’t use your credit cards as a Stress Relief.

If you are in trouble then read my blog post on Credit Score-Improving It 


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