Most of us are bad budget makers. We have little cash we spend we have a credit card we over spend incurring debt. We have time for all sorts of recreations but no time to assess our own balance sheet till the situation actually gets very alarming. Most credit card companies give us the money facility for goods or services in the present and we are expected to repay in the within a fixed tenure. In reality it is a process of postponed payment, a privilege we have to pay and sometimes pay at a very high rate.

At any given time the use of credit increases purchasing power and thus makes possible the provision of more goods or services than the cash on hand would allow. The family should understand the nature and operation of credit since repayment of the amount borrowed, together with interest for its use, must eventually be made. Most of us forget that credit can never take the place of income in personal and family finance, but it does have the power to alter the time when you are going to choose various debt relief options. The cost of credit and the legal power of the creditor to force repayment of indebtedness is not always realized or understood by users of credit.

Most families that borrow do so to meet needs or obligations. Many families buy their houses on mortgage plan. They have some cash, they borrow, they build, and they have the satisfaction of ownership during payment. Many families follow the same reasoning in deciding to use the installment method for the purchase of equipment or luxury goods. Often credit is also used by families to repay an accumulation of small debts or bills. Such an arrangement makes it possible to get debt relief as one is indebted to one major agency rather than to a whole number of smaller creditors. Another reason of burrowing is to meet family emergencies. Many families that manage their finances well use credit for the purchase of necessary commodities and profit there from.

Before using credit the family should consider not only the satisfaction gained by the immediate possession of goods but also the future adjustments to be imposed by repayment. Consumer credits come at a higher cost because the bookkeeping, accounting cost, notices, etc are a large item in the consumer credit transaction as the loan is usually liquidated in small amounts through a long period of time.

As most burrowers are modern young generation with different financial philosophy than their forefathers a spurt in the defaulters was noticed nation wise in the whole of the western countries. The government was compelled to form policy for defaulters to bail them out of the situation. Thus many states came up with policy for instance Wyoming debt relief, Illinois debt relief, Vermont debt relief, Michigan debt relief, Idaho debt relief, Mississippi debt relief, Montana debt relief, Arizona debt relief etc. Thus credit giving continues so do defaulters.

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