4.1 Attitudes toward credit and debt

In this section:

• 4.1.1 Your attitude toward credit and debt
• 4.1.2 Personal factors and attitudes toward credit
• 4.1.3 Pros and cons of using credit
• 4.1.4 "Good debt" and "bad debt"
• 4.1.5 Debt load
• 4.1.6 Calculating debt ratio
• 4.1.7 Summary of key messages

Introduction

Some people take on debt without hesitation. Others avoid it at all costs. Some fit in the middle. Your attitudes toward spending and owing money affect whether or not you will borrow and how you handle debt when you do borrow.

This section will help you identify what kind of spender you are and clarify your attitudes toward credit. You'll learn:

• how your needs and wants influence your use of credit
• the difference between "good debt" and "bad debt"
• how to determine an appropriate amount of debt for you.