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Debt > Problems (1)
In today's credit society, it is nearly impossible to avoid the offers that we receive from banks and credit card companies. The marketing of credit cards is the same as the marketing of products and credit card companies often tend to play on our ego and emotions. Credit card companies entice us by playing on our “self importance” with flashy high credit line offers on Gold, Platinum and Titanium cards. The challenge is to ask ourselves if we really need the purchasing power and the temptation that these cards offer.
Behavioral patterns and external influences largely determine the outcome of a debtor’s credit experience. To have a positive experience with obtaining debt and maintaining good credit, we must understand and limit the internal and external impulses that drive us. Some people categorize debt as a “necessary evil”, which, too a certain extent may be true. Debt is certainly necessary because most Americans may never be able to make an outright purchase of a new car or home if they could not acquire a line of credit. Some individuals believe that credit worthiness is improved by being completely debt free. However, consumers who have no credit history may be just as likely to be denied for credit as those who have derogatory information on their credit, despite the fact that the person with no credit is completely in control of their finances and the person with credit is not. Lenders are most interested in seeing how consumers handle debt. Having credit allows you to display the history of your finances to lending institutions that are concerned about getting a return on money that they lend. It is important that you establish some form of credit history because credit provides convenience and improves your purchasing power, which may improve your quality of life.
Good debt is debt that works for the consumer.
Taking a loan on a car is an example of good debt because if you could not obtain a car to get to work in,
you probably would not be able to maintain a sufficient income stream to support your family or the style of life that you want.
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