What is the price you pay for being in debt?
It is not your immortal Soul…..but there is a price.
So what is the price or prices you pay for being in debt? I will only address two (2) here, but there are more.
Interest and Charges
For many people who are in debt and struggling with their bill, the charges that are added on, and the interest charged, just seems to increase or exacerbate the problem of being in debt even more!
You miss a payment, fall in arrears, then default possibly, and your £100, or £1000 of what you owe/debt, grows and grows! There are charges added to the account. Late fees, missed payment fees, we don’t even know what those fees are fees.
The balance just increases.
Then there can be the interest on the account.
You no longer can afford to make payments, but the balance grows due to the fact the lender/creditor continues to charge interest. And on credit cards, this can be a lot of interest.
Miss a few payments and with an interest rate of 19%, and the late charges, the balance just grows, and grows, and grows.
Your Credit Score
The other main thing that is a price you pay for being in debt in your credit, and credit score.
If you miss payments, fall into arrears, or default on an account….anything you may do outside of the original agreement with the creditor/lender, can affect your credit and credit score. Which means lowering it.
That is a price you pay.
Should you enter into a token payment plan or some form of insolvency, your credit score will drop, which will cost you more later. Cost you more in the fact you will pay a higher interest rate for any future credit.
And the higher interest rate will cost you.
These are just two (2) ways being in debt, besides the fact you are in debt, the debt can cost you even more.