The disadvantages of being in debt
“The debtor is a slave to the lender.” Proverbs 22:7
Being in debt limits your options and opportunities in life! If you are in debt, you are chained to the borrower- in other words, you are your lender’s slave. Slavery as we know it was abolished a long time ago yet people are slaves in various ways and being in debt is one form which I am going to discuss here.
There are numerous disadvantages to borrowing money and being in debt and the main ones are;
1.When you use credit to make a purchase, you are spending more money on that purchase than the person who buys with their own money. In the long run, the difference between what you could have paid for stuff bought with your own money and what you actually paid for them with the interest added is quite substantial.
2.Being in debt limits your options in life! Someone with cash in the bank is able to travel to another town in search of work or has money invest or to purchase a household appliance which breaks down.
3.Being unable to meet the minimum payments required will affect your credit score or credit rating and credit card companies are likely to change the status of your card which will mean they charge you a higher interest rate in future.
4.Being stressed out over your debts can create health problems.
5.When you are in debt, you are setting a bad advantage to your children who then think that buying on credit and being in debt is normal.
The bottom line is “If you don’t have the money don’t buy it.” The crunch always comes when you have to pay the money back and for a lot of people that crunch comes with a life changing event such as a job loss, divorce, or death of a family member.