In the 21st century a robust and modern economy depends on credit. Consumers and businesses need to borrow from one another to continue doing what they do best. You probably have a car loan, mortgage or even a credit card which are all forms of credit. Even if you pay your credit card off in every month, there is a still a 4 week gap where you are ‘borrowing’ money from the bank.
While access to ‘credit’ is almost a necessity for the modern economy, if it is poorly managed it can quickly become a necessary evil. The global financial crisis of 2008 and the European debt crisis of 2010 where all due to the poor management of credit by banks, governments, businesses and even the consumer.
Check out this video to understand how it all works.
What are your personal views on credit? Can you manage the debt you have or are you stretching your limits? Let us know by commenting below.