Debt Traps

The Sign of Debt
It is not difficult to recognise the difference between good borrowing and silly borrowing. Good borrowing usually allows you plenty of time to think before making a decision. You don’t usually get in over your head with this type of borrowing, but silly borrowing can dump you into the deep end very quickly. Good borrowing means you take the time to research and think about a proposal, but silly borrowing wants you to jump in and sign up and buy the item on offer.

They say that the trouble with debt can be likened to the proverbial frog in the pot of boiling water. If you try to pop him in once the water is boiling he will jump out. But if you start him in cold water and slowly raise the temperature he will just sit there and cook to death.

People are like the frog when it comes to silly debt.

They don’t jump into the boiling water by buying something really big and expensive with their credit card, but they consistently buy small purchases over months and years, and only pay the minimum payment each month. That is, they allow the temperature to slowly rise until they are cooked. ...

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