No one would disagree that paying off consumer debt is the right thing to do. In fact, most would say the quicker you can pay it off the better because it will save you more money in interest. Well, it turns out how you pay off debt is more important than you think.
The percentage of people using credit cards as the sole method of payment has increased dramatically in recent years. More than 50% of credit card holders are now using their credit cards for everyday purchases. No doubt the lure of the rewards programs offered by most credit cards today has a lot to do with this trend. What’s yet unknown but predictable is the harm this will have on the financial health of many of these people.
It was Shakespeare who wrote, “Never a borrower or a lender be, for loan oft loses both itself and friend.” These words, although written for a play (Hamlet) are wise and prove often to be true. Borrowing can lead to unwanted consequences. But, is borrowing and taking on a measure of debt always wrong?