“Character loans are the best loans.”
- John Baldwin, banker
Debt is something you owe in return for goods or services you’ve received, like money you owe for the price of a bicycle or money you owe for having your hair cut. Sometimes that debt is paid off immediately—in cash. At other times, the debt or money you owe is paid back a little at a time.
How you handle your debts will determine your financial success or failure. An inevitable sign of growing up is the stack of bills that will soon show up in your mailbox. Many of them will come well over two weeks before they are due, and it will be very tempting to let them collect dust on your desk. But don’t let them sit too long. Before you know it, the due date will pass and you will be making a late payment. Those late payments will be recorded on your credit report and will determine what you will be allowed to purchase later.
Always pay your bills when they are due, or even before.