Borrowing money

Credit cards are a form of borrowing.

When you use a credit card (different banks allow this at different ages) you are borrowing money from them. You agree to pay it back at a given time (usually the end of the month).

Credit cards are a way of life - most people have one - and many people have up to 5!

Check out the terms of the card you are using. Many card companies charge you interest on the full amount borrowed, even if you pay off part of the amount owed. Check out how much interest they charge.

Remember that if you don't pay off the card you may end up paying a lot more for the goods than you actually paid!



If you are beginning to build up a large amount that you are not able to pay back talk to someone you trust about how to get rid of this debt.

Debit cards are also used by some people - these take the money out of your account straight away so you need to make sure that you have the money before you spend it. Decide which you prefer.

Only borrow if you really need to and pay it back as soon as possible.

Borrowing money is something to avoid if possible. But many of us do borrow at some time or other. There is nothing worse than going out and finding you have not got enough money for the fare home!

When you borrow from someone make a note and pay it back as soon as you can. This way they will be happy to lend you money another time. If you don't pay them back they won't let you borrow another time.

Banks and other services charge for borrowing. Check out the difference in interest rates so you get the best deal.

If you borrow from a bank, building society or other loan agency you will be charged. It is important to check the rate at which you will be charged and the terms under which you have to pay the money back. Look around for the best deal.

'Loan Shark' is the name given to people who offer to lend you money at very high interest rates. You may well end up with a much larger debt if you borrow from them.

Talk to someone as soon as you get in debt. Your parents/carers will help you sort out your difficulties. They may not give you the money; but may help you as you raise the money or cut back in other areas.

If you borrow from friends make sure you pay it back quickly. Give them a present as a thank you!

For small amounts of money ask family and friends to help you out. But remember to pay them back as soon as you can.

Try not to make a habit of this - the more often you ask the less likely they are to lend you the money.

Say thank you by giving them a small gift - this could be something you have made. Many people borrow money - a mortgage is borrowed money to pay for a house. A mortgage can last for 20-30 years.

It is not wrong to borrow money - many people do this. Credit cards are a form of borrowing.

Try to borrow only when necessary and check the terms. Borrowing from family and friends is better than from a bank or other lender.



Whenever borrowing or lending it is a good idea to have a written agreement between you. This should say when and how often you need to be paid or you need to pay.



It is worth doing this even if you are borrowing from friends and family. Make a note so you do not forget.

An agreement shows that you are serious about paying the money back.

If family or friends offer to give you the money think about what you can do for them in return. You need to be prepared to offer them money if they end up in a similar situation.

If you borrow money make sure you are also willing to lend when you can.

Visit the pocket money section.