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Borrowing money is not bad. In fact, it is unfair to put all the blame on this financial transaction for all the bad things that you are going through right now. The truth is, debt becomes a problem because we do not know how to handle it. Credit makes our lives difficult because of our own financial choices. Having mentioned that, it is important for you to realize that it is okay to borrow money. There are several instances when borrowing is actually the best way that you can improve your financial life. But to make it work, you have to understand that there are rules that you have to follow. Credit management is very important because it will help you enjoy the benefits of the loan without letting it compromise your financial situation. The reality is, we live in a society where debt is a common practice. In the past, it was taboo and lenders are perceived to be illegal businessmen. Now, it is even advertised on TV. In fact, if you use credit cards, it is like a status symbol. People who use their credit cards are deemed to live an affluent life. According to the data published on USNews.com, American consumers increased their borrowing in January of this year. The data revealed that the borrowing is at the slowest rate compared to the past three year - but it is still increasing. The borrowing of consumers rose by $10.5 billion - a mere 3.58%. Regardless of the growth, one thing is for certain, people will continue to borrow money and will keep on doing it unless they are faced with a financial crisis.
10 important rules when you borrow moneyAs mentioned, borrowing money is okay. But you have to understand and abide by the rules that will keep you from abusing it. Sometimes, people abuse the use of debt - that is the very thing that destroys their financial position. If you want to continue using debt and at the same time, protect your finances from ruin, it is important that you follow the 10 commandments of borrowing money.
- You should have a good reason to borrow money.
- You should know how you will pay it back.
- You should understand the terms of the loan.
- You should research the different options that you have.
- You should always pay on or before the due date.
- You should commit to your payment plan.
- You should stop borrowing money until you have paid off the last.
- You should never run away from your credit obligation.
- You should keep an eye on your credit activities.
- You should seek help when it is necessary.