Is it Always Bad to Have Debt?

Personal debt is a tricky part of life that every single person has to face up to in some form, and at some severity level, at some point. We have been told repeatedly that debt is a bad thing and that we should immediately look for ways to drastically cut our personal debt, but is this inherently true in all cases? Are there certain times when a little bit of debt can be a positive thing for a person? Here, we look at a few of the personal debt myths that have been put forward in the mainstream media over the years, and whether or not you should start to relax a little more and look at your personal debt in a slightly different light.

One of the things that has been told to us all on a daily basis is that debt is bad. Have a think about it though and this doesn’t necessarily have to be seen a truth that we all hold dear. Of course, if you are borrowing money at an irresponsible rate and level, or borrowing money from irresponsible lenders, this is where you get into long-term financial trouble. Say, for instance, that you wish to borrow money from a payday loan company –what you need to do is make sure you connect with a payday loan service that offers responsible lending, with no hidden fees and a transparency that makes them trustworthy enough to borrow money from over the short-term. Now, think again about having debt, and when you do wish to apply for a mortgage, or another type of large credit facility at some point in your life (which most people will at some point) you’ll have to have a good credit score most likely. You can only build a good credit score by borrowing money (having debt) and demonstrating that you are capable of managing your finances and paying off that debt within the agreed terms and timeframe.

Another myth about personal debt is that we are all ok paying off the bare minimum payments each month on credit cards and store cards. Sometimes this is the only thing you can do due to your personal income at that time, but whenever you have the ability to pay off more than your minimum payment you should take it. The longer you pay minimum payments only the higher the overall debt that you pay back will be.

Another myth is that we should keep quiet when we are struggling with our finances, that if you tell your bank or lender that you are struggling to make payments that it will be bad news for you. On the contrary the consumer has more rights than ever before, and the sooner you inform your credit facility, whether it is your bank or a payday loan company, that you are struggling a bit, the sooner they can help with an interest freeze, payment holiday, or something similar.

Bad debt is a bad thing for your life, but not all debt is inherently bad and you should look at debt as a way of managing your finances through life.

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