Credit Cards and Debt 101
Sunday May 4, 2008
When you hear discussion about credit cards and debt, the first reaction tells you that debt is bad and should be avoided. Well, credit cards or any type of debt are really just a financial tool, and when used properly, can be very beneficial. For example, how many people could save up hundreds of thousands of dollars to buy a home with cash? It can be done, but it might take a few decades to reach that goal. Instead, by borrowing money you can use leverage to make the purchase now instead of waiting.
The problem with any tool is that they can be used improperly, which can do more harm than good. Using credit is no different. When used properly, you can leverage your buying power to make financial decisions that will benefit you in the long run. The basics to credit and debt cover:
The problem with any tool is that they can be used improperly, which can do more harm than good. Using credit is no different. When used properly, you can leverage your buying power to make financial decisions that will benefit you in the long run. The basics to credit and debt cover:
- How to establish credit.
- The importance of your credit score.
- How to improve your credit score.
- Getting out of debt.
- Borrowing money for college or a business.
Comments
Nice tips. I found it is very useful.
I so agree with you. I’ve had a number of students ask me similar questions and I love the way you put it. May I quote you or forward this blog to them?
Actually, maxing out your loans is in general a better practice because the interest and repayment options are so low. You should just take your overage that you don’t need and place in in a CD, not the market because the long term investment needed for the market will not be adventitious for this type of practice. Essentially, you live in a country that does not value your education enough to fund it and you need to be prepared for the job market after school. You can use your student loan money to help you after school until you get your feet on the ground, maybe even buy a house if you save correctly. It is one of the only free bees in life you will get, and if you don’t “come from money” it is one of your only opportunities to get a jump start and provide you with the chances that the more fortunate do have. So in short, yes, even if it sounds counter-intuitive, I am advocating not listening to the advice in this article.