Debt:
It is easy to get into debt - hard to get out!

What is debt?
It is money or property that one person is obliged to pay to another. So it can include: money owed to building societies, banks, credit cards, store cards, friends and relatives.

To pay for a mortgage people borrow money and pay interest. However, you are not in debt until you miss a payment that should have been made.

One major source of debt is the use of credit cards! Use these wisely or change to a debit card which takes the money straight out of the bank.

If you have to borrow money e.g. for a mortgage think carefully:

• What are the level of interest rates?
• Are there any penalty clauses?
• What are the levels of repayment?

Think about your credit card payments! Check the level of interest that you are paying.

Did you know? If you only pay part of your credit card bill at the end of the month you may well pay interest on the full amount, not just on the money still on the bill. For instance: Your credit card bill is £100. You pay off £80 leaving £20. The company will charge you interest on the £100 not the £20 you still have to pay off. This way you will end up paying a lot more for the things you buy!

If you get into debt - seek help straight away!

Next topic... SAVING.