So far, we have talked only on the bad side of personal finance. But actually credit is extremely beneficial to us when used properly. The problem lies in the proper usage of credit. Experts are divided on the benefits of extending consumer credit. A few will argue that it is a sub-optimal use of money while others say it helps the economy stay afloat by creating demand and the jobs.
A clear example of the benefits of personal finance is what went in South Korea after the Asian banking and currency crises of 1997. The government was prodded by international lenders like the World Bank and International Monetary Fund to stimulate the economy by making consumer credit readily and widely available. Most citizens took up the government’s offer and their consumer spending helped revitalize their nation’s economy ravaged by currency speculators and allowed South Korea to repay international lenders earlier than anticipated. South Koreans are the only Asians who have large card debts because the government gave an added incentive to credit card holders to make tax deductions on their purchases. The reason was that card purchases make for an easier tax collection as these provide a paper audit trail. A coin always has two sides, so we will now discuss and know a little bit more of good finance.
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