A STARTING POINT TO STAYING ON TOP OF CREDIT
At its simplest, debt is something borrowed that has to be returned to the person who loaned it out. That could mean:
- Owing a mate £20
- Using an overdraft facility
- Taking out a mortgage
- Paying for things, such as a sofa or car, in instalments or on a credit card.
These are pretty universal types of borrowing, so we probably all have debt of some kind! But is having a mortgage different from being ‘in debt’? And why is some borrowing seen as more acceptable, or less worrying, than others?
GETTING THE MOST FROM CREDIT
Calling debt ‘good’ or ‘bad’ can make it a tough topic to deal with. Thinking of it as a tool can help you see debt for what it is: something that can help (or hinder) your financial goals.
Using credit doesn’t have to be frightening, the last resort, or something beyond your control. The key to getting the most from it lies in considering your options and going into things with your eyes open.
Choosing when and how to take on debt leaves you better off, at less risk, and confident you made the right choice for your situation!
WHY PLANNING AHEAD PAYS OFF
‘Falling into debt’ – when the money you owe outpaces your ability to repay it – can happen to anyone. Interest rates may make it more expensive to pay back than you’d imagined, or an unexpected redundancy, illness or emergency could leave you with less cash to meet repayments. Charges and penalty fees can then snowball your debt, making it harder to stay on top of (or keep up with) other bills.
Because credit carries a risk, it’s important to make debt a considered purchase. To get the most from it, you need to understand how to use it wisely, when to say ‘no’, and how to take back control when it’s no longer a benefit. We’ll show you how.