Everybody has debt these days – what with credit cards, store cards, overdrafts, catalogues and personal loans – but what’s the difference between a good debt and a bad debt?
Unless you are very good with money, there’s rarely ever a good debt. Mortgages were considered quite a good debt whilst the housing market was booming, because as house prices soared homeowners benefited from taking all of the extra value if they sold their property.
But now that the housing market is plummeting and mortgages are hard to secure, these are no longer considered good by many experts, at present.
When you can comfortably repay your all of your balances without having to sleep rough or sell your granny, taking on another credit card or store card doesn’t seem so bad. But bad debts form quite quickly when they can’t be paid. What seemed comfortable when you were working and earning money is completely different to when an unexpected event happens, such as a job loss, redundancy or when a relationship breaks down.
What to do with bad debts
People who don’t have savings to keep them afloat in these situations will find that things can deteriorate very quickly, and debts can begin to spiral out of control – after all, they’ll still need to eat and bills will still need repaying. If the amount of money coming into a household is suddenly much smaller, this creates a shortfall.
Using overdrafts, loans or other forms of credit to keep up with payments isn’t the answer, as the credit will soon run dry (especially in this financial climate) – leaving huge balances, and lots of interest being charged.
If you’re struggling to keep up with all of your repayments and your balances aren’t getting any smaller, you could benefit from our FREE debt advice.
We offer a number of ways to help you pay off debts, some of which could see you get out of debt within five years. Our debt solutions will help you regain control of your finances, whilst still repaying all of the unsecured balances that you owe, including overdrafts, catalogues, personal loans, store cards, credit cards etc. – without the need for another loan.
You’ll no longer have to deal with creditors constant phone calls and letter demands, as we’ll handle all of these for you – allowing you to sleep easy again.
Everyone has some debt, but call the number at the top of this page for FREE debt advice to make sure yours don’t turn into bad debts.
