I have been very guilty of this recently. I don’t believe that we have to have a ton of credit card debt to get ahead in life. As an entrepreneur, I am able to make up a lot of the credit card debt so that I can pay down the rest of my debt as well. I am also able to pay off the majority of my student loans in a relatively short amount of time.
But I also believe that people who have the ability to pay off their debt on their own (and especially on a credit card) are more likely to be able to do so than people who are unable to do so. It is also more likely that they will have better credit, which is a good thing. And yes, I like to pay down my credit card debt because I believe in credit.
Paying off your credit card debt is like paying off your mortgage. It is the second least stressful thing you can do after paying off your credit card. You can just pay the minimum amount you owe instead, and you won’t have to worry about making any late payments.
In the same way I pay down my credit card debt, I pay down my monthly payment on my car. Car loans are the biggest single source of debt on the planet. As a matter of fact, the only time you can get a car loan out of your car loan is when you get an auto loan.
I know what you’re thinking. “What about my car loan?” It’s like buying a car without a credit card. It’s the same thing with a car. You can’t just buy a car with a credit card, you have to pay down your balance with your credit card first.
The answer? Well, you can. However, most people do it without even thinking it through. It’s just something you do. A person that doesn’t think about it probably will soon. Why? Because people usually do it without really understanding how they’re going to pay someone back.
This is exactly why banks will not loan money to people that dont have money in reserve or have a bad credit score. You have to ask for money yourself. It does not come out of your wallet.
The other reason why banks wont lend money to someone who has bad credit is that bank staffs make the decision on who to lend money to. If the borrower is bad credit, then the bank staff will not lend money to him because he will be an immediate risk. The bank will not lend money to someone that is not a big risk to them.
When that decision is made, the bank staff must be sure that the borrower can repay it. Otherwise the bank will lose the money and the borrower will not be able to repay it to the bank. In other words, the bank staff will lend to the borrower who is a risk to them. The borrower will not be able to pay back the loan because they will be going into a cash flow bust.
In another part of the world, where the laws of economics are different, it is not uncommon for banks to lend to people who are not big risk to them. For example, there is a story out of India where a bank lent to a man who was not that big a risk to them, and he repaid the loan in full, saying that he did so because he could not pay it back.