1. Debt has been a part of every bodyÂ’s life
and personal debt gradient is on the rise
because credit hasnÂ’t been easier to
receive.
credit card consolidation

2. In everyday life, most of us would not have enough finances in one
go when it comes to paying for our apartments or childrenÂ’s college
education Hence we borrow in one form or the other to get the
expenses meet Debt is not a simple concept to comprehend, but in
fact is a bit difficult one to get hold of Ideally, as per financial
expertsÂ’ statements, a personÂ’s total monthly long term debt
payments – which includes credit cards and mortgage - should not
exceed 36 percent of his/her gross income for a month

3. This is the bench mark mortgage bankers take in to consideration
while appraising the creditworthiness of a potential borrower It is
very easy to spend far more than what one could afford It is
interesting and intriguing that a large number of people does exactly
this and fail to recognize that they are heading down in an abyss -
the deeper you sink, the more difficult will be the chances of a
recovery That is unbridled spending

4. But to avoid debt is not a smart option either If properly handled,
debt can be money spinning as well That brings us to the concepts
of Good Debts and Bad Debts Let us see what are the differences
between good debts and bad debts? The secret of acting smart with
the money is all about learning to discern between good debt credit
card consolidation and bad debt

5. Unfortunately this is something that most people around the world
fail to be experts in Good debt is something that helps improve your
financial position or net worth That is, in simpler terms, a good debt
increases cash flow That is, mortgage debt, for example, is good
debt

6. You are borrowing money from someone, but youÂ’re getting a tax
advantage so that you are able to cancel interest on an asset thatÂ’s
gaining in value over time Also you can live there On the other
hand bad debt can occur when you buy something that goes down in
value immediately That is, when the thing that has been brought on
credit does not have the potential to increase its value

7. Purchase of disposable goods or durable items or, as commonly
found, the use of higher interest credit cards can lead one into bad
debts Ideally, debt-to-income ratio of a person shouldn't go above
20 percent That is - while adding up all of your non-mortgage loans,
credit cards and outstanding charges - it should not exceed 20% of
the annual income If it goes beyond the 20% mark, that is bad debt
and it doesnÂ’t go down well in his/her credit reports even if
payments are made in time

8. To conclude, debts can be productive if properly and rationally
exploited It is financially draining to incur bad debts but if you could
gain more by investing the borrowed money than the interest
associated with the credit, then it is good debt which is useful
Managing oneÂ’s debt and hence the finances might need a bit of
brain scratching

9. But it is not that enigmatic for a common man to comprehend After
all it is no rocket technology It is all about learning to manage your
finances! Article Tags: ,

10. credit card consolidation