While you may think that credit can be helpful, if you are not careful it can harm you way more than help. Only in rare instances can credit be good. For instance, when someone wants to buy a home usually the only way to do so is with a loan (known as a mortgage). In the case of a mortgage you are getting property which is something physical you have which means if for some reason you fail to pay the mortgage then then lender can come and take your home in place of the mortgage.
Other types of credit, however, are not like buying a home. Credit card debit is one such type. With credit card debt you usually buy a lot of smaller items and you do not have one big thing to show for it. So if someone can't pay back their credit card then there is nothing for anyone to take.
While this might sound okay, it can severely affect your credit report, which in turn can affect your ability to get other loans and/or credit that you might need (such as a mortgage).
So be very careful about obtaining and using credit cards. They can do far more harm than good!
Friday, August 17, 2007
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