Debt often sounds attractive. You get this car now, but you can pay for it over five years. You can buy those concert tickets today and worry about how to pay for them next month.
Over time, though, debt really stacks up, and you may run into some serious financial issues, perhaps because of a job loss. If you cannot afford to pay off all that you owe, then you may be forced to consider bankruptcy and similar debt relief options.
Below are five problems that the availability of credit and the resulting debt creates:
- You may not be able to get the major loans that you want, like a home mortgage, because you have so much debt from smaller purchases.
- When you know you can use credit, you are tempted to spend more than you're earning. You get the instant gratification, even if you pay for it later.
- You spend more money. Debt isn't free. Credit cards have high interest rates. Your home mortgage could cause you to pay nearly twice what the home is worth.
- You gamble regarding your future income. No job is a sure thing. If you agree to pay off debt for years based on your current income, you don't know if it will be affordable a year or five years from now.
- Other areas of your life take a hit. Stress causes medical problems. Financial issues can ruin your marriage. That debt isn't just a financial complication anymore.
If you are facing too much debt and you're unsure where to turn, make sure you consider all of your legal options to eliminate the debt and take positive steps moving forward.
Source: The Balance, "9 Reasons Debt Is Bad for You," LaToya Irby, accessed April 12, 2018