USC Credit Union Blog

USC Credit Union Blog

FREE eBook: Guide to Living with Debt

 

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"Let’s face it: living debt-free today is practically impossible. Whether you’ve got a car loan, student loans, several credit cards or a mortgage, most of us have some debt."

Debt isn't necessarily a dirty four-letter word though. But, here's the important thing to remember: Some amount of personal debt is good because it helps you establish a credit rating and teaches you how to manage your money. Debt's only a problem when the payments become overwhelming; you miss payments, or you find yourself borrowing money to make ends meet.

This eBook looks at all the different kinds of debt you can carry, the good and the bad, some guidelines to follow when you need to borrow money, and what to do if you find yourself in a pinch.

Top Three Things You Should Know About Debt

1) Different Faces of Debt

Generally, mortgage and student loan debt are considered "good" debt. Why? Because with the first, you’re building value for yourself with your home and with the second, a higher education should translate into a better paying job and more aggressive career advancement. As you’ve probably guessed, credit card debt usually falls into the “bad” debt category. It’s normally associated with high interest rates and relatively small monthly payments.

2) Debts to Avoid

Tax Debts
You don’t ever want to mess with Uncle Sam. Check with your employer to make sure you’re having the right amount taken out of each paycheck so you don’t owe a big chunk at the end of the year.
Payday Loans
Have you ever wondered why you see so many Payday loan stores around? It’s because so many of us are having trouble making ends meet and these stores offer a quick, but very costly fix. Please - only use this kind of loan if it’s a dire emergency and you can’t find a friend or relative to help you.

3) Living With Debt

Yes, you're going to have debt–sometimes more, sometimes less– depending on where you are in your life. You might start out with some student loan debt, add a car loan and eventually, a mortgage. Just try to keep your overall long-term debt under 36% of your gross income and you'll be ok.

Download our Free eBook to learn the ins and outs of building good credit and lowering bad debts.

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