Many Americans thinks that a little debt will not hurt. Usually, that’s how it all begins. Debt starts small and builds until things escalate, and you fall into a downward spiral because you falsely assume that the small loan you took on is insignificant. Before you know it, all your debts have piled up, and they are now beyond your control. Here are some reasons why even good debts can be bad for you:

Encourages You to Spend What You Do Not Have

All debt, whether good or bad, encourages you to spend money that you do not have. Clearly, the reason why you’re going into debt is because you’re purchasing something that is beyond your budget. If you can actually afford it, there is no reason to get a loan for it.

Graylock Advisors, a team of consolidation loan providers, noted that debt can be dangerous because it is a form of temptation that lures you to keep on spending and living beyond your means. What’s scary is that buying something with credit gives you an emotional high for getting something new, without having to bear the consequences of parting with your hard earned money. Eventually, all this spending that you cannot truly afford will catch you off guard, and by then, it will be too late.

Costs You Your Hard-Earned Money

Make no mistake about it; debt costs you even more money. Swiping your credit card and signing that loan may feel like you are getting free money, but that is never the case. In most instances, you get more than you bargained for because you pay a huge price for getting into this debt. Even good debts have exorbitant interest rates that put you at a disadvantage.

Graylock Advisors want you to remember that the higher your interest rate, the more money you will fork out to pay for these debts. In addition to that, the longer you pay for the item and the more debts you have, the bigger your interest will be. Take note that the only exceptions to this are interest-free loans and zero percent APR credit card promos, but even those have limits, which can be easily forfeited the moment you default on your monthly payment.

Hurts Your Future Income

Each loan you make hurts your future income because you are borrowing against future earnings. Every single time you take a loan or swipe something to your credit card, you are using money that you have yet to earn. Imagine having so many loans, which you hope to settle with the money you think you will earn in the future. What will happen then if you lose your job? You will essentially be paying for something that you have used up and no longer has value with your future hard-earned income.

Prevents You From Being Financially Free

Monthly debt payments will keep you from attaining your financial goals because they limit your income stream. The more debt you accumulate, the larger your monthly payments will be. This leaves you with less money to spend for your essentials.

Causes Undue Stress and Medical Issues

Any kind of debt means you have to worry about making payments. Even good debts make you wonder how you’re going to pay all your monthly bills on time. The stress from all these debts lead to a lot of serious medical issues from stomach ulcers, high blood pressure, diabetes, and the like. On top of that, the feelings of anxiety can cause severe depression, which has the capacity to affect your quality of life.

Hurts Relationships

Last, but not least, all forms of debt put a strain on household finances. This pressure can build up, with the burden felt not just by you, but also by your spouse and children. These loans will spark arguments about financial and lifestyle choices. Arguments ensue and tension reaches a breaking point. In fact, studies indicate that debt and financial issues are one of the leading causes of marital breakdown. Now, is that so-called good debt really worth all this aggravation at the expense of your family? If you’re about to sign that loan because you think you’re making a good deal, please, think again.