The Problem with Debt

Illustrate the problems of a debtor strategy.

So let's look at the problem with consumer debt. We all know that debt is an issue. But first, when you borrow and go into debt when you don't have the resources, you're putting an obligation on future resources. Additionally, the capital you commit to the cost of the purchase as well as the financing costs are gone forever. You become a debtor to the creditor. You lose control - the creditor is in control of your resources.

Consumer debt is an inefficient purchasing strategy. The initial purchase is lost as well as the interest owed, causing further loss that can compound and if you're not careful, can spiral out of control.  How do people solve this problem in real life?  They adopt a "Pay Cash" strategy.

No math presented on this screen.