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# Debt management

I agree with @LudwigVan_fan - not all debt is bad and you just need to use it responsibly.

My advice is to make sure you find out what the interest rate is and what the terms of the loan/ credit cards are.

The interest rate is usually called an "APR" - annual percentage rate. This site has a good explanation of what that is and why it matters. Essentially it's what you're going to pay to borrow money.

Here's a quick example:

The loan or credit card has an APR of **15%**.

You borrow **$100**.

At the end of the term (1 year in this example), you'd owe the original $100 plus $15 for **$115** total.

That extra $15 comes from the original $100 multiplied by 15% (or 0.15 - another way to write 15%).

That's a very simple example and most loans and credit cards charge compound interest - where interest is multiplied by the new balance each term. This kind of interest, compound interest, can grow VERY QUICKLY!

So be sure you know the interest rate, aka: APR, and the terms - how often the interest is charged.

This is also a decent intro video to the idea.