Ohio State University Extension/Research

Manage Your Money

Lesson 4: How Much Credit Can You Afford?

MYM-3-03

Be Credit Wise

At a given interest rate, borrowing a smaller amount of money will result in a lower overall credit cost to you. So, a larger down payment lowers the total amount you will have to pay in finance charges.

tv The longer you take to repay your debt, the more you will pay. The cost will vary with how long you take to pay. Try to take the shortest repayment period possible, and make the highest monthly payments you can safely afford.

Credit can be a friend or a foe and an asset or a liability for the family money management plan. Unwise use of credit can ruin future plans. If you find your debts have piled up and you feel as if you are out of control, develop a plan to help solve the problem. Getting out of debt takes a lot of work and self-discipline. It cannot be done overnight, but it can be done!

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Written by Ella Mae Bard, Extension Agent in Family & Consumer Sciences, Knox Co., Carolyn McKinney, Family Resource Management Specialist, Consumer & Textile Sciences Dept., Nancy Hudson, Northeast District Family & Consumer Sciences Specialist, and Diane Johnson, Extension Agent in Family & Consumer Sciences, Darke Co., Ohio State University Extension. Portions adapted from "Managing Your Money," prepared (1994, 1996) by Eleanor Ames, former OSU Extension Agent (Madison Co.) in Family & Consumer Sciences.

For more information about family life issues, visit http://families.osu.edu

Manage Your Money is a six-part self-study course. The lessons include:
  1. Getting Started
  2. Where Does Your Money Go?
  3. Stop Spending Leaks
  1. How Much Credit Can You Afford?
  2. Develop Your Budget
  3. Your Net Worth and Financial Records

Appreciation is expressed to Marjorie McCullough, Office Associate, Consumer and Textile Sciences Department, who worked with several drafts of these materials.

This material is intended only for educational purposes. Mention of a proprietary product, trademark or commercial firm in text or figures does not constitute endorsement by Ohio State University Extension and does not imply approval to the exclusion of other products, firms, or organizations. For specific, consult your financial or legal adviser.

All educational programs conducted by Ohio State University Extension are available to clientele on a nondiscriminatory basis without regard to race, color, creed, religion, sexual orientation, national origin, gender, age, disability or Vietnam-era veteran status.

Keith L. Smith, Associate Vice President for Ag. Adm. and Director, OSU Extension.

TDD No. 800-589-8292 (Ohio only) or 614-292-1868