Maintaining a good lifestyle and buying fashion accessories and expensive gadgets does not hurt anyone. In fact, it should not. However, using your credit card to pay for those expenses may hurt you in the long run. Well, using credit card is not bad at all, if you maintain a good financial discipline and pay off all your debts without hurting your credit score. However, as Warren Buffett has said, “Chains of habit are too light to be felt until they are too heavy to be broken.” It is indeed difficult to get out of debt, if you are in the habit of borrowing to fulfill your personal desires. This is the reason why personal debt has risen dramatically over the past few years. However, all debt is not bad. Buying your first home with the loan is not bad because you are building asset/wealth, which gives you equity over the period of time. In fact, in business terms such kind of debt is termed as leverage where your returns are higher than the interest you have to pay on your loan. On the other hand, loan for personal consumption such as enjoying vacations is not leverage, it is a debt trap. Here is what some of the great minds have to say about debt.
“Bad Debt is sacrificing your future day needs for your present day desires” –Suze Orman
“You can’t be in debt and win. It doesn’t work” –Dave Ramsey
“Rather go to bed without dinner than to rise in debt”—Benjamin Franklin
“Bad debt is debt that makes you poorer” —Robert Kiyosaki
“Never Spend your Money before you have it” —Thomas Jefferson
“I do not like debt and do not like to invest in companies that have too much debt”—Warren Buffett
“Small debts are like small shot; they are rattling on every side, and can scarcely be escaped without a wound.”—Samuel Johnson