Today, more than ever, handling loans and credit intelligently is the most important thing that you can do. The fact is, there is plenty of credit available to consumers. Unfortunately, most of them just don’t know how to use it properly. If you are one of those people, you could be heading for a lots of financial trouble.

Before you apply for any new credit, it’s important to know your financial situation and your means of paying back. For example, if there is a large purchase that you want to make, see if you can afford it. If you cannot pay it off completely by the end of the month, do the calculations, and see exactly how long it will take you. Try to stay on track, however. Then, ensure that you don’t allow any more purchases until the other is paid off.

If you don’t stop yourself, you will find that you end up in a great deal of debt that will put undue stress on you. There is no reason to overdo the amount of credit you have, especially when you are using it.

While it’s good to have it, it’s better to have a plan. Many people live on credit. The fact is, this devastating recession that we are still living through has proven just that. It led many people down the bankruptcy path.

So, in order to avoid bankruptcy or other financial catastrophes, learn to budget and to contain yourself. Remember this money is not yours, it is only borrowed. Eventually, it will require repayment.

Therefore, if you are in real need for it, do some comparison shopping. Check out the different rates that creditors are offering, and always stick to a plan. This will of weight you from accumulating extreme debt, and keep you in line with realistic goals.

Enrique Castillano also writes about Loans and Credit for other websites including Prestamosand/Prestamos Urgentes