Are you a winner or loser?

Debt is a huge part of our economy. Across the world, governments rely on debt to pay for services, banks rely on debt to make money and consumers rely on debt to buy necessary items such as houses and cars.

It is a global cycle, a game of buying and selling debt create money. And as with any games there are winners and losers. On a large scale, successful banks are generally the winners, but on a smaller scale you can be either a winner or loser with your own personal debt.

Losing

Running up debts that you can not afford and having repayments each month that you can not keep up with is obviously a bad idea from the point of view of your budget. It reduces the amount of spare cash you have each month and it also costs you money because you will have additional charges added on for late bills or for going over your overdraft.

This traps you into a cycle where you are paying out a lot each month to lenders at a time when you are probably struggling to reduce your outgoings and balance your budget. You get further and further into debt and reduce your credit score further in the process, limiting your options to get credit in the future.

Winning

Winners are the people with good or excellent credit histories, who get easy acceptance for loans, credit cards and mortgages, and benefit from the lowest interest rates and APRs available. This …