Debt and America

I was raised to have a healthy dislike for debt.  I hate owing people money, it gets on my nerves. Then I move to America ha!

Naturally I RAN away from any form of debt and whenever someone asked me if I wanted a credit card I was quick to remind them that I had a debit card and I owe no money. I thought that was smart, unfortunately it was not.

An easy way to explain this from the perspective of a foreigner is that America runs on debt. Debt builds credit. You need to have some credit to buy a car, a home, take out certain loans etc etc. So I learned that in America being in debt can be a good thing.

There is  good debt and bad debt. Good debt is let’s say you open a credit card your first year of arrival. On that card you are given an allocated amount to spend. Every time you spend out of your credit card, you make sure you pay it back (into that credit card account) with either your debit card or cash. Doing this will build your credit. Your credit is very important to your long term stay in America.Credit and credit score are so important, they can affect your ability to get a job. Bad debt will be a situation were the person doesn’t pay off their credit card and the consequences hits. Or a person spending more than they can pay back.

So let’s take a look at this scenario if a person has lived in the United States for 5 years, has absolutely NO credit (because they don’t understand how credit works). This person  then wants to buy a car or even needs to take out a loan to get started on a business or pay for tuition. The person may find it very hard to get the money they need because they have no credit. However, they may finally find a banking institution that will work with them to take out a loan BUT their interest when paying back will be sky high expensive.

So my advice for migrants is to avoid the mistake I made and start building your credit today! For more useful information visit:






4 Replies to “Debt and America”

  1. I really enjoyed reading this. Our blogs have a lot in common. I like that your focus is the US as I live in the UK. I also write for BN. Maybe we can do something in future. Please don’t stop writing. You have a fan.


  2. Great article and good advice on good vs bad debt. I collected a credit card out of interest a few months after migrating to the U.K…and wait for it, I wasn’t comfortable owing money so I cancelled the card after a couple of months 🙂 I guess it is costly learning from experience…


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