4 Pillars Clears Up Commonly Believed Misconceptions about Debt

Today, it is virtually impossible to live without at least some level of debt. Chances are good that you cannot afford to pay cash for that new car, which means you need an auto loan. You most likely aren’t wealthy enough to pay for your home in its entirety, which means getting a mortgage. You probably have several credit cards and other lines of credit, as well. Most Canadians don’t bat an eye at this situation, but you should. Debt is never a good thing – let 4 Pillars help clear up some of the most common misconceptions about debt.

Some Debt Is Good

This is probably the most pervasive misconception out there, because it involves at least a grain of truth. Some debt is “good”, but it is only good in the eyes of other creditors – people who want you to owe them money. The truth of the matter is that no debt is actually good, as it all indicates that you’re beholden to someone else, and that another entity has a primary claim on a portion of your income, therefore a claim on your life.

Store Credit Cards Are Good Options

While there’s value in having a high-balance credit card for emergency use, you’ll find that store cards (or retailer cards, if you prefer), really aren’t worth your time. Why is that? Take a look at the fine print on your agreement and you’ll likely find that you’re paying very high interest rates, and you’re also probably on the hook for a monthly fee. Plus, that card is only good with the retailer in question. At 4 Pillars, we believe the best credit cards have low interest, no or low fees, and can be used just about anywhere.

Paying Off Your Debt Immediately Boosts Your Credit Score

This one is understandable. After all, if you no longer owe a debt, your credit score should go up, right? It’s a reflection of your debt load, isn’t it? At 4 Pillars, we often get asked about this by consumers confused about why their score is still low. The truth is that debts are only part of the equation. Late payments, missed payments, and other negatives have a dramatic impact, as well, and can take many years to fall off your report.

These are just three of the common misconceptions concerning debt. If you’re struggling to make ends meet, we invite you to schedule a free analysis. Call 4 Pillars at 866-690-DEBT (3328) or visit our Get Started page.