What is Debt?

Debt is when you borrow money from someone or a company with the promise to pay it back later. The money you borrow could be for things like a car, a house, or even everyday expenses like using a credit card.

For example, when you use a credit card to buy something, you're borrowing money from the credit card company. If you don't pay off the full amount right away, you'll have to pay back the money you owe plus interest, which is extra money added as a fee.

While borrowing money can be helpful in certain situations, like buying something big you can’t afford immediately, it can also cause problems if you borrow too much and don’t pay it back on time. The more you owe, the harder it becomes to pay it off, especially with interest.

To avoid problems with debt, it’s important to only borrow when necessary, keep track of what you owe, and make sure you can pay it back.