7 Reasons Why Debt is Bad at Young Age

A little debt will not hurt you, is it true? You make a small purchase using a credit card and later realise you have thousands of dollars in debt. It is how debt ruins your personal and professional life. There are many advantages to taking debt if you can manage it well. Still, you must know the reasons to avoid taking debt. 

Here we will discuss why debt is bad at a young age and even when you mature. So, read this post and get the ideal information about the disadvantage of taking debt or a loan. 

Why Debt is Bad for you

Why Debt is Bad for you: 7 Reasons to Know  

#1. Debt Motivates to Spend More.

Debt looks very lucrative as it allows you to spend more, even when you can not afford to buy the stuff. Having a low-interest credit card or similar thing motivates you to buy what you want rather than what you need. 

You use your emotional decisions to put credit money into buying unnecessary stuff. It looks like you get something that has no financial benefit for you or your family. As you also have to pay the interest rate associated with the credit you have taken. 

#2. Debt Forces to Pay more than the Product Cost.

Debt always forces you to pay more than the product cost. For example, if you buy a laptop for $700 or Rs 49,000 using your credit card, it charges an 11% interest rate. In this case, you will end up paying $777 (Rs 54,390); here, you will pay $77 (Rs 5,390) extra money for the purchase.

Imagine the interest amount when you buy most products using a credit card; it can surely cross $200 and even more for the total purchase you make. Most people ignore this term and keep getting into debt; later, they ask their friends and family to pay money for loan amount and interest. 

#3. Debt Creates Problems for Financial Independence.

You might have thought of investing the extra money you save every month. It can be in a savings account, emergency fund, or other types of investment. But when you have a loan or credit, you must use this extra money to repay it. 

It is how you stay away from your financial independence. The more debt you raise, the more interest you will have to pay. Ultimately it will create lots of challenges for you to achieve financial independence. 

#4. Debt is not Free; it Costs Money.

It may look free while getting a new credit card or signing the loan document. As bankers and merchants attract you with zero interest rates and other benefits, you ignore hidden charges. If you use more money, you will have to pay more interest; if the interest rate is high, the interest amount becomes much higher than the money you spend. 

In general, you pay for the money spent and additional for the credit you used. However, nowadays, there are many interest-free credit cards and loan options, but still, there are some limitations. You will pay a very high-interest rate if you do not meet these limitations. 

#5. Debt Hurts Credit Score.

Having debt affects almost 30% of your credit score. The figure is based on the debt you have compared to your credit limit. It includes the original loan and credit limit set by the loan provider; it accumulates all these things and gives you a credit score. The more loan or debt you have, the minimum credit score you will get. 

Even when you have a credit card and do not use it, it also affects your personal life and costs the products or services you buy. Therefore, with low credit scores, people face challenges when getting a new loan and look for the importance of avoiding debt. Hence, you must be aware of why debt is bad and your financial plan accordingly. 

#6. Debt Cause Mental and Health Issues

Most people with debt always think about how they will repay the loan, how they will get the loan easily, and how they will manage their finances efficiently. Sometimes, these questions cause mental health issues like migraines, depression, and even heart attacks. 

The more debt or loan you take, the more you will worry about repaying it. It is one of the most important reasons why debt is bad at a young age and even when you mature. 

#7.Debt Deducts Future Income.

Whenever you get a loan or use money from a credit card, you think you will earn good money and pay the debt from it. The future is unpredictable, and you do not know what will happen next. Also, would you feel good when you start paying money for something you already used a month or years ago? 

It might hurt and demotivate you and create a financial burden on you. Sometimes your predictions can go wrong, and you might not earn enough to repay the loan amount. Hence, it's good not to play the game with your future and make a wise decision.


#1. How does Debt Affect Your Life?

Debt negatively impacts your personal life; it encourages you to buy more and more stuff that you can not afford with a regular income. And later, it forces you to end up paying the high-interest amount that keeps you away from reaching your financial independence goal

#2. Why is Debt Good?

Some people also think debt is good for themself; it can be a very tight limit. Because debt can be good if you use it for essential things such as buying a home. However, these loans can also be bad when you get a huge loan to buy a luxury home that you can not even afford and will face problems repaying the loan amount. 


Here we discussed seven reasons why debt is bad at a young age and even when you become mature. Most people take debt for higher studies, buying new homes, etc. But some people also take a loan for unnecessary stuff such as having to make costly tours and others. However, it can harm your personal life and cause you to pay high interest. 

Therefore, avoiding taking any loan or credit is good if you can not afford to pay without affecting your personal life. It's always good to manage your money efficiently or learn about frugal living that teaches you to manage limited earnings effectively to get the most productive benefit.

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