INFOGRAPHIC: Should You Carry Debt on Credit Cards or Loans?

Joel Anderson  |

Got a lot of debt? Get in line. Virtually the entire country is carrying a lot of debt at the moment. Whether it's the $16 trillion our nation owes, the $1.2 trillion in student loan debt our college graduates need to pay back, or the $11.5 trillion in consumer debt financing our cars and big-screen TVs (and houses, I guess houses are a big part of that), owing money in the long term is a fact of American life.

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Which, of course, isn't necessarily a bad thing. As Harry Bailey points out in It's a Wonderful Life, borrowing money for a home allows a growing family to live in a nicer abode rather than spending the years necessary to save up enough to buy. Sure, taking on debt means paying more in the long run, but sometimes that's more than worth it to be able to make a purchase in the near-term. Smart use of debt can dramatically increase one's quality of life.

But the key word there is "smart." The rate at which you borrow money matters, so does how long you take in paying it back. And taking on the wrong kind of debt can ultimately be a cripling mistake, even if the decision to take on debt at all was a good one. This is, of course, assuming that one chooses to take on debt, which most Americans don't do.

Regardless of why you owe money, there are good and bad ways to owe. The following infographic from Pioneer Services explores the pros and cons of using your credit cards to carry a debt load vs. a long-term structured loan.


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