Time to read : 3 Minutes
Did You Know How Many Aussies Are In Debt
Did you know...? is Expert Analysis's quick must-know fact for Australian households.
Think of it as an espresso hit of personal finance news.
Today's Did you know...? is about debt. A lot of us have it. It also raises the question is it a good thing to have or not?
The answer is yes, and, no.
Go deeper: what is good and bad debt?
Good debt is money that you borrow that will help you in the longterm, e.g. a home loan that you can afford to pay on a house that grows in value.
Student loans are another example of the right kind of debt: it will help your career prospects and can also be tax deductible.
Another potentially clever way to use debt is investing in your business, e.g. moving to bigger and better premises where you can generate more cash.
Bad debt is usually created by spending more than you have (and can pay back) on things that won't build your future financial health. This can happen when you use a credit card incorrectly, so instead of paying off what you owe, you end up with lots of maxed-out cards.
Payday loans can also cause trouble because they usually have high interest rates and fees, which means you could dig yourself into a hole that is hard to get out of.
Be aware: banks and lenders do check your credit score, and, so should you. Ideally cross-check a couple times a year to make sure that there is nothing amiss!
Financial Disclaimer:
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions.
