In the personal finance sphere, there are many people who are simply debt averse. It makes sense. Debt is the opposite of wealth, when considered from a certain perspective. Some people are in debt up to their eyeballs, with interest accruing at rates they can’t possibly keep up with. This is a situation we’re all familiar with, and the easy way to avoid this eventuality is to simply never go into debt in the first place.

While that strategy, on the surface, seems legit, it’s not actually the best path forward. In reality, you’re going to have to take on some debt in order to attain wealth of any kind. So first things first, you’ve got to give up an irrational fear of debt. All debt is not bad. There is healthy debt and unhealthy debt, and you’ve just got to figure out how to develop the right one.

Unhealthy debt has very high interest and is usually made available to consumers through credit cards and other offers of personal credit. Credit in these forms can get out of control pretty quickly. It’s not uncommon to see interest and annual fee rates (together forming your credit account’s APR) which exceed 25%! That’s huge, and nobody can easily afford interest payments that are this high. This is exactly the kind of debt you’ve got to avoid. You can do so by not paying for things which you can’t afford with the cash in your pocket or bank account.

But not all credit cards charge interest rates this high. These APRs will be somewhere in the neighborhood of 10-15%, and while that’s still rather expensive, it’s credit that you can take part in without as much worry that it’s going to spiral out of control. When using credit that costs around this much, always be sure to pay it off as quickly as possible, ideally before any charges start to rack up. You can actually earn a lot of great rewards using credit like this, like travel rewards and other options. You can also earn a good credit history this way, without fearing for your financial future. On the contrary, you will actually be building a better financial future!

Finally, you’ve got loans like mortgages which are the only way that most people will be able to afford a house or other important personal investments. Personal Lending Group is an example of a company that makes such loans available to consumers. They’re affordable and part of a balanced personal finance plan, one which will allow you to build equity and, thereby, wealth, while living a more balanced and stable lifestyle.

As you can see, not all debt is created equally. If you are able to stave off the most expensive debt options, while taking advantage of low interest debt that is meant to help you build wealth and property, you’ll be on the right track on your personal finance journey. So let go of your fear of debt. Debt can help you, you just have to know how to use it right.

Categories: Credit