Good vs. Bad Credit

ScalesUsing credit is not a bad thing — it’s how you use credit that can be good or bad. Some benefits of using credit include:

  • It’s convenient and safer than carrying cash.
  • You can spread out payments. 
  • It’s helpful for emergency situations.
  • Using credit can help build a strong credit history.

Spending spurs the U.S. economy and can boost consumer confidence. When confidence increases, the economy usually expands, and that is good for everyone. 

Credit also can have its drawbacks if you don’t understand when and why to use it. Using credit to “buy now” without thinking about “paying later” can cause you to pay more than you intended through interest and fees. This can happen when:

  • You use credit to buy things you can’t afford and don’t really need.
  • You take advantage of special offers such as “no interest for 12 months” without planning to pay the debt before the special offer expires.
  • You don’t understand the terms of the lending agreement.
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