When someone falls into debt due to a history of using credit there is invariably a rush of questions as to why they saw fit to borrow so much in the first place.

Part of the reason is the way that credit has been sold by the banks – if you apply today you could have that new car tomorrow – and part is due to the fact that people always feel more secure the more money they have.

The word “credit” has always been associated with positive things, but in a financial sense it actually has more to do with debt than with anything totally positive. The overall issue is that “credit” actually relates to debt.

If “credit” was always called “debt” it is likely that fewer people would be as willing as many of us currently are to take large amounts of it.

When we use a credit card, we are not using our own money, but actually borrowing from a bank to pay for something. Sometimes this is unavoidable, or at least the “best” option – in the case of medical treatment, for example, or unavoidable travel.

As often as not, though, it is for something we want, not something we need.

Being credit aware is more important now than ever. Banks, who once were happy to give credit in the knowledge that they would get it back with interest, are now a great deal more careful in terms of who they give money to.

Extending the terms of your credit may not be as easy an option now. It is wise to think before taking the plunge.