There are really two kinds of debt. Bad debt is money you owe and have little chance to repay. Credit card debt can stay with you for a long time, particularly with high interest rates. You can end up paying off that mall shopping spree long after the clothes you bought have made their way to the local charity shop. Good debt, on the other hand, represents a risk you’ve taken, and may yield a financial reward. Opening a business involves taking on a loan, but in exchange, you have the chance to build a constant source of cash for your life. You need a loan to buy a house, but you can always sell the house, often making a tidy profit.
At some point, you’re going to want that good debt. You’ll want to stop renting, or own your own business, or go back to school to get ahead at work. The only way to get enough cash for those options is to take out a loan. When the time comes, you’re going to need a good credit history. So, let’s turn that bad debt into good debt. Get a credit card from someone you trust. Use that credit card for your monthly expenses, such as groceries and gas. Then, pay it off in full every month. If you have outstanding credit card debt, roll it into a lower-interest rate loan. Start with the highest interest rate and work your way down.
If you’d like to know more about getting your first credit card, or finding a low-interest way to combine all of your outstanding bad debt, click here www.imcu.com. If you’re already on top of your bad debt, give us a call to find out about good debt. You can find out what it will take to own a home or start a business, and then start the process of getting everything in line. The younger you are when you start, the easier it can be to get everything working for you.