Is it a Problem When Credit/Debt Fuels the Economy?

There are times of surplus and times of debt. Over time, the two should balance out, but the credit debt problem has caused most people to have more debt than they are capable of managing.

Proper use of credit actually fuels economic growth, which is why the government never offers bailouts to individual citizens to get them and keep them out of debt. Your debt spending creates jobs, spurs industry growth, and keeps the economy flourishing. There is a fine line, however, between the positive attributes of a debt driven economy and the negative. While making major purchases with credit debt, like houses and cars, is probably the only way to afford the purchase, using your credit cards to buy things you would not otherwise be able to afford in the hopes that you will be able to pay it off later is not wise.

In order to keep credit debt working in favor of the economy, you should never take on more debt than you can manage. As well, you should focus on building savings and making wise investments that build your wealth.



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