Good Debt/Bad Debt: Getting a Handle on Your Money

I really love Wikipedia.
They have a very interesting article on "debt."

"Debt allows people and organizations to do things that they would otherwise not be able, or allowed, to do. Commonly, people in industrialised nations use it to purchase houses, cars and many other things too expensive to buy with cash on hand."

That's a pretty standard definition. I wish it were that simple and if you click on the link to read the article, you'll get an understanding of how complicated and complex is. Even religions have something to say about it...

"Islam forbids lending with interest even today, while the Catholic church allowed it from 1822 onwards, and the Torah states that all debts should be erased every 7 years and every 50 years."

Super interesting stuff...there's even an entire article on Islamic Banking.

See? It just goes on and on...I love Wikipedia...it's the greatest, most educating time-waster. Especially when you're at work! (just don't tell my boss!)

Many of us consider debt a negative force, a consequence of bad decision-making and the source of all stress. I mean, who doesn't feel good about the idea of erasing all of our debt? I'd love that!

As we all know that's a totally unrealistic scenario (don't believe the ending for Fight Club, debts can't be erased by blowing up credit card buildings), find some comfort in the positive aspects of debt. With the proper management a debt can build and/or improve your credit which is definitely necessary in today's world. When I finished college, I immediately acquired a debt - my student loan. It's a great debt to carry around because the interest rate is low and fixed and my monthly payments are low. I never have a problem paying it and it's going to be around for the next 10 years, so my credit score can always rely on that. I also bought an affordable car, another good debt to carry around. I was able to make consistent payments.

I don't have that car anymore but I'll save that for another post.

Where I ran into trouble was with my credit cards. I've since had to slice them up. I'm still paying two cards back, one of which I had completely paid off, only to misuse my way back up to $1000+ debt. I'm making good progress on these cards, especially since I joined a credit union and consolidated them into one single, low interest credit card.

If you work for a company that offers credit union membership, for Pete's sake, JOIN! I joined, got my low-interest credit card with a balance transfer and even though I don't work for the company anymore, I'll be a member until the day I die. My girlfriend was even allowed to sign up under me. She's going to be a member forever as well. DO IT!!!!


I'm getting off track. There are several new loans out there that shouldn't be confused with that "predatory" buzz word. Taking out small affordable loans, like Title Loans, can be an easy and safe way to resolve issues of needing immediate money, when need be.

AutoCashUSA.com has more information available on the matter.

Title loans are paid back through inexpensive monthly premiums. The borrower uses his/her automobile as collateral for the loan. A great variable about title loans is that the borrower can keep their car through the duration of the loan. Managing your daily spending habits will help you stay afloat for the during and payback of the loan. Another way to manage your loan is to pay more than the monthly premium, which cuts down your interest and pays off the loan quicker. Payday loans work similarly, and you can read more about this at USAPayDayLenders.com

Paying debt back in a timely fashion is a sure-fire way to establish great credit.