One common money myth is that credit should always be avoided. There are a number of scenarios where new debt may be the best option, but sometimes it’s just hard to tell.
No Debt about It
Some financial advisers say things like “debt is dumb” and “run away” when discussing credit. However, often that’s just to ward off impulse buys, instant gratification, or items purchased on a whim. Indeed, a fun lifestyle of leisure is worth saving up for – not falling into debt for. In many cases, yes, debt is dumb. However, when emergencies arise, debt certainly can help.
The trick is to plan ahead, and to decide what exactly constitutes an “emergency” early. Here are 3 financial situations where credit may be your best bet.
Debtor Safe than Sorry
When these situations arise, you can turn to your emergency fund. However, sometimes that isn’t enough. Occasionally, catastrophes drain your bank account and leave you with more bills than you can pay. That’s when credit can help.
Then, once your situation has stabilized, it’s time to dig out of debt. Since life is unpredictable, getting out of debt can be tricky. So it’s a good thing you have a team of non-profit credit counselors that are only a phone call away.
You cannot predict the future, but you can prepare for it. Just know that if all else fails, credit can be a good safety net— as long as you have a plan to pay it back.
How do you recommend using debt wisely?
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Consumer Education Services, Inc. empowers people to overcome their financial challenges and lead financially-healthy lives.
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